§ 6-5. Changes to loan terms: what binds the guarantor?

The lender can change interest rates, fees and other costs in the credit agreement with effect for the guarantor as well, when the lender is entitled to make the change towards the borrower. The guarantor can therefore face higher costs without being asked, as long as the change is lawful towards the borrower.

Other changes to the credit agreement that harm the guarantor have no effect on him. If the guarantor agrees to a change, the rules on entering into an agreement and on information before an agreement (§ 3-9 and § 3-22) apply in the same way when the terms of the guarantee agreement are changed. Under § 3-9, the agreement must be made in writing, and a consumer (forbruker) must sign. Under § 3-22, the customer (kunde) must receive the terms of the agreement and all relevant information in good time before the agreement is entered into.

This section must be read together with the other rules on the guarantor's position. § 6-4 lets the guarantor demand at any time to be told what interest rate and what other costs apply to the credit. § 6-6 protects him against security disappearing: without his express consent, the lender cannot, as a starting point, release security that was provided or was meant to be provided when the personal guarantee (kausjon) was agreed. § 6-3 requires the lender to give notice of default.

Example: The lender and the borrower agree to raise the interest rate in a way the credit agreement allows. This also applies to the guarantor. If they change other terms to the guarantor's detriment, this does not bind him without his consent.