Local guarantor pressured to pay RM10,800 after friend’s default

KUCHING (Feb 9): A local man was coerced into settling an outstanding sum of RM10,800 after his friend defaulted on a loan from a moneylender, said Michael Kong.

The Stampin MP Chong Chieng Jen’s special assistant said the man, identified as Low, had signed as guarantor for his friend who took a loan couple of years ago.

As a precaution, Low initially asked his friend to deposit the monthly repayments with him, which he then transferred to the moneylender.

“This was done to ensure that the loan obligations were properly met. After some time, his friend suggested that he pay the moneylender directly to ‘save the hassle’. Trusting his friend, Low agreed. Tragically, his friend has (since) passed away.

“Last week, Low received a letter from the moneylender demanding payment of an alleged outstanding sum of RM10,800,” he said in a statement.

According to Kong, Low visited the moneylender’s office to seek clarification and was informed that no payments had been made by his friend, resulting in the outstanding balance.

“Not wanting any further trouble, Low decided to accept it and asked for two weeks to settle the amount. Low was then asked to return the following day to sign an agreement for the settlement.

“During the signing, he was shocked that he had to pay exceeding RM40,000 to fully settle the matter. When he refused to sign, he was pressured repeatedly to settle the amount,” said Kong.

Low managed to leave the premises only after giving the excuse that he needed to attend to his elderly mother.

“Disturbingly, even then, the moneylender demanded a photograph and the personal details of his mother,” Kong added.

Left with little choice, Low sought assistance from Kong, who engaged directly with the moneylender. Following the intervention, the moneylender agreed to settle the matter for the initial sum of RM10,800.

Low was subsequently able to raise the funds from family members to fully settle the loan.

Kong said this case serves as a serious warning to the public.

He cautioned that borrowing from moneylenders, especially agreeing to stand as a guarantor, can expose individuals to significant financial and emotional distress.

“What may begin as a small loan can quickly escalate through excessive charges and aggressive pressure tactics. Guarantors, in particular, are often left bearing the full burden when borrowers are unable or no longer around to pay,” he explained.

As such, he urged the public to think twice before turning to moneylenders or agreeing to guarantee someone else’s loan, no matter how close the relationship may be.

“Always understand the risks involved, insist on transparency and seek proper advice before signing any document,” he advised.