Quick Definition

A guarantor is an individual or entity that agrees to be responsible for another's debt or performance under a contract, if the original party fails to meet their obligations.

Examples

• 1A parent co-signing a student loan for their child, agreeing to repay the loan if the child cannot.
• 2A business acting as a guarantor for a subsidiary by backing its obligations to a bank.
• 3An individual guaranteeing a rental agreement, ensuring the rent will be paid if the tenant fails to do so.
• 4A company guaranteeing a loan for an employee who is purchasing essential equipment for work.

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