# How to Place Guarantee Funds On-Hold? When specifying guarantors for a loan, this feature allows user to specify what amount of the loan the guarantor stands as guarantee. There are 2 types of guarantees: **Own Guarantee**: One or more of own deposit accounts can act as guarantee. **Others Guarantee**: One or more of other clients/members and their deposit accounts can act as guarantee. ### **Description:** * Loans are linked to savings account and savings amounts are blocked. * The amount of guarantee becomes blocked (on-hold funds) - i.e. client cannot withdraw this amount but will continue to earn interest. * If another member stands as guarantee, then funds can be clocked for savings account. * As the loan gets repaid, the blocked funds get "released" (i.e. available for withdrawal) accordingly. * Guarantor may belong to same group or may be outside the group. On agreeing to be a guarantor, a part of his/her "available funds" can be specified as guarantee and this amount gets "blocked". * Guarantor funds gets "released" first, before loan account holder's funds are "released". * If loan is rejected, then all guarantees for this loan are released. ### Step 1: **Enabling "Place Guarantee Funds on-hold?"** Go to Admin>>Loan Product>>Create Loan Product. ![](https://mifosforge.jira.com/wiki/download/thumbnails/85623288/7ty.png?version=1\&modificationDate=1420392392946\&cacheVersion=1\&api=v2\&width=600) ### Step 2: **Linking Savings account to the Loan account** Client>>New Loan application>> Select Savings account to link to loan account.
### Step 3: In the Provided example, Loan application is being created for Anna White for a Loan amount of 10000 US$. Percentage amount needs to be calculated manually outside the Mifos X. Since here, a) Guarantee from Own funds is 40% of the Loan amount, that will be 4000 US$. b) Guarantee from Guarantor funds is 20% of the Loan amount, that will be 2000 US$. **Note:** This amount needs to be input in the amount field initially with respect to the Guarantee's. **Create Guarantor** In the Loan application page>>More>>Create Guarantor ![](https://mifosforge.jira.com/wiki/download/thumbnails/85623288/up.png?version=2\&modificationDate=1420394094716\&cacheVersion=1\&api=v2\&width=850) a) Creating Guarantor for Own account and providing amount to block the funds from savings account. ![](https://mifosforge.jira.com/wiki/download/thumbnails/85623288/gn1.png?version=2\&modificationDate=1420448479072\&cacheVersion=1\&api=v2\&width=450) b) Creating Guarantor for Other guarantees and providing amount to block the funds from savings account. ![](https://mifosforge.jira.com/wiki/download/thumbnails/85623288/gn.png?version=1\&modificationDate=1420447368818\&cacheVersion=1\&api=v2\&width=450) ### Step 4: Then Approve the Loan & Disburse. **Recovery from Loan:** This enables recovering of provided percentage loan amount from Guarantor through linked savings account. ![](https://mifosforge.jira.com/wiki/download/thumbnails/85623288/q1.png?version=1\&modificationDate=1420457360176\&cacheVersion=1\&api=v2\&width=800) **Funds getting released:** Once the Repayment start happening. The funds gets released automatically for savings account with respect to the provided percentage. Note: Guarantor funds gets "released" first, before loan account holder's funds are "released" **Withdrawing amount from savings account** Here In the image below, on trying to withdraw the set percentage, it will throw an error message as "Insufficient funds to complete the transactions."
**Reference Link:** [Guarantor Amount Capture and Blocking/On-Hold of Funds in Guarantor Accounts](http://mifosforge.jira.com/wiki/pages/createpage.action?spaceKey=MIFOSX\&title=Guarantor+Amount+Capture+and+Blocking%2FOn-Hold+of+Funds+in+Guarantor+Accounts) Related articles * Page:[Installation of Mifos X through github](https://mifosforge.jira.com/wiki/spaces/docs/pages/122683423/Installation+of+Mifos+X+through+github) * Page:[Manage Centers](https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/clients-groups-and-centers/manage-centers) * Page:[Product Mix](https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/administration/products/loan-products/product-mix) * Page:[Enabling Floating Rate](https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/administration/products/loan-products/loan-product-fields/enabling-floating-rate) * Page:[Savings Products](https://docs.mifos.org/mifosx/user-manual/for-administrators-mifos-x-platform/administration/products/untitled)