Kagaznama

Deed of Guarantee (Personal Guarantee)

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Also called

Personal Guarantee
Guarantee Deed
Guarantor Agreement
Surety Deed
Deed of Personal Guarantee for Home Loan
Contract of Guarantee under the Indian Contract Act, 1872

When you need it

Stand guarantor for a home loan from a bank or housing finance company — not for money lent privately between people. Know this first: your liability is co-extensive with the borrower's (s.128, Contract Act) — the lender can demand from you on day one without suing the borrower or selling the property first (Bank of Bihar v Damodar Prasad, 1969; SBI v Indexport, 1992); on a secured loan, s.13(11) SARFAESI lets it skip the s.13(4) steps against the asset entirely.

The loan shows on YOUR credit report and counts against your own borrowing regardless of any demand. You can't walk away: s.130 revokes only future transactions, and a fully disbursed loan has none left. Refusing to pay after a valid demand, despite having the means, risks wilful-defaulter action (RBI's 2024 Directions). What you DO get: ss.133-135, 139, 141 protections — a variance, the borrower's release, extra time given, or lost security discharges you. Bank forms usually waive all of these; this template keeps them and adds notice rights — the reason to use it. Most banks will hand you their own form anyway — use this as a negotiating draft or a comparison checklist; some HFCs accept a marked-up version. Don't use this if: you're also mortgaging your own property (a different, ad valorem, registrable document); the guarantor is a company/LLP/firm/trust/HUF karta; the loan is already in default or being restructured; either party is a non-resident (FEMA applies); or it isn't a housing loan (the recitals and SARFAESI references assume one).

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You can fill this one in on this site, and read the whole draft on screen before you decide anything about it. It is a carefully drafted template; it is not advice about your own facts.

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See stamp duty, registration and witnesses

What follows is the position for this kind of document. The amount is set by the state the property is in and it changes, so the figure for your own state is worth confirming at the sub-registrar’s office before you pay anything.

Stamp duty

Stamp duty is a State subject — both article and rate depend on where you sign. Most States charge a guarantee (which creates no charge on property) as a 'bond' or residual agreement, a modest fixed/slab sum; a few charge ad valorem. Rates move with each Finance Act — confirm via the current Schedule I, the State's e-stamping portal (SHCIL, or IGRS/Kaveri/Grama One), or just ask the branch. Buy the stamp in the executing guarantor's own name, on or after its date; two guarantors on one deed need only one properly stamped instrument. Under-stamped, s.35 Indian Stamp Act bars it from evidence until the deficit plus a penalty (up to 10x) is paid — usually the lender's problem, not an automatic release for you. Signing outside India: stamp it within three months of first receipt in India (s.18).

Registration

Not required — no right, title or interest in property, so it's outside s.17(1)(b), Registration Act 1908. That changes once you ALSO secure the guarantee on your own property — a mortgage of Rs.100+, other than by deposit of title deeds, then needs registration and two witnesses (s.59, TPA 1882) — get a separate deed drawn.

Notarisation

Not legally required — valid on signature. Worth it if the deed travels by courier, or you're executing outside India: attest before an Indian consular officer or a local notary with apostille, then stamp within three months (s.18).

Witnesses

No statute compels attestation (unlike a will, s.63, or a mortgage, s.59, TPA), but every lender insists on two anyway — evidence if a signature is disputed. Two independent adults, name/address/phone/PAN recorded; never the borrower, co-borrower or a bank employee. Each guarantor signs every page.

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Sample preview — placeholder answers, not your data

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DEED OF GUARANTEE

Personal guarantee for a housing loan, given under the Indian Contract Act, 1872

Loan account / sanction reference: HHLDEL00098234512
Borrower: Aarav Ramesh Sharma and Priya Aarav Sharma
Lender: HDFC Bank Limited, Sector 82, Mohali
Guarantor: Sunita Devi Verma and Rakesh Kumar Verma
Loan amount: ₹55,00,000 (Rupees Fifty Five Lakh only)

This Deed of Guarantee is made at Mohali, Punjab on 2 April 2026.

Sunita Devi Verma, wife of Rakesh Kumar Verma, aged about 52 years, Government service by occupation, resident of X, PAN ABCPV1234K

AND

Rakesh Kumar Verma, son of Late Shri Mohan Lal Verma, resident of X, PAN ABCPV5678M

(the "Guarantor". In this Deed "I", "me" and "my" mean the Guarantor. Where two persons sign as Guarantor, those words mean each of us, and our liability to the Lender is joint and several.)

IN FAVOUR OF

HDFC Bank Limited, a banking company, acting through its Sector 82, Mohali branch at X (the "Lender").

Background

A. By its sanction letter dated 1 April 2026, the Lender has sanctioned to the Borrower a housing loan of ₹55,00,000 (Rupees Fifty Five Lakh only), repayable over 240 months, carrying interest at 8.75% per annum floating, linked to the repo rate (the "Loan"), in respect of the property described in the Schedule to this Deed (the "Property").

B. The Borrower is my younger brother, residing at X. Priya Aarav Sharma is a co-borrower under the Loan, and in this Deed the expression "Borrower" includes the co-borrower.

C. The Lender has required a personal guarantee as a condition of sanctioning the Loan.

D. At the Borrower's request, and knowing that the Lender is acting on the strength of this Deed, I have agreed to give that guarantee, on the terms set out below and on no other terms.

E. I have been given a copy of the sanction letter, I have had the opportunity to take independent legal advice, and I am signing with an understanding of what clause 3 of this Deed means.

1. Definitions

1.1 "Guaranteed Obligations" means everything the Borrower owes the Lender under the Loan from time to time — principal, contracted interest, penal charges levied in accordance with the Reserve Bank of India's directions on penal charges in loan accounts, insurance premia properly debited to the loan account, and the Lender's reasonable and documented costs of recovery. My liability for the Guaranteed Obligations is subject to any monetary limit expressly stated in this Deed.

1.2 "Loan Documents" means the sanction letter dated 1 April 2026, the loan agreement, and the security documents executed for the Loan.

1.3 "the Act" means the Indian Contract Act, 1872.

2. The guarantee

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