Guarantor Definition
A guarantor is an individual or entity that agrees to be responsible for another party’s debt or performance under a contract should that party fail to meet its obligations. A guarantor may be required to provide collateral, such as property or cash, to secure the debt.
In the event that the borrower defaults on the loan, the guarantor will be responsible for repaying the debt. The creditor may also pursue legal action against the guarantor. Guarantors are typically relatives or close friends of the borrower who have a good credit history and are able to repay the debt if necessary.
