What happens if a guaranteed loan is not paid in full regarding the borrower’s liability?

When a guaranteed loan is not paid in full, the borrower typically remains fully liable for the outstanding debt. This means that regardless of the status of the loan guarantee, the borrower is held accountable for the full amount, including any remaining balance. The guarantee does not eliminate the borrower's responsibility to repay the loan; it simply provides a safety net for the lender in case of default.

It's important for borrowers to understand that even if the loan is guaranteed by an agency, they still have a legal obligation to repay the amount agreed upon in the loan contract. The guarantee primarily protects the lender by ensuring that they can recover some of their losses if the borrower defaults, but it does not relieve the borrower of their debt obligation. This fundamental principle underscores the importance of responsible borrowing and repayment practices.