Guarantees are Legal

What is a Guarantee?
A guarantee is a written promise by you (the guarantor) that the person who is obtaining credit (the debtor or borrower) will keep to all the terms and conditions of their contract (the credit contract, or loan agreement). The guarantee means that if the person borrowing the money is unable to repay the loan then you, as the guarantor, will become legally liable to pay whatever is owed. Your guarantee may either be oral or written. A written guarantee is best because it will withstand any attacks, whereas an oral one is difficult to prove.

Who is a Guarantor?
The guarantor is the party who agrees to be responsible for the payment of someone else’s debts. That is, you are the guarantor if you promise to repay a loan that the borrower of the money does not repay. The lender will usually ask for a guarantee when lending money especially if they think the borrower will have difficulty repaying the loan.

The guarantor makes the promise or guarantee to a creditor or lender so that the lender will hav...

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