Definition of Guarantor:
A person, organization, or thing that guarantees something.
Person or firm that endorses a three party agreement to guarantee that promises made by the first party (the principal) to the second party (client or lender) will be fulfilled, and assumes liability if the principal fails to fulfill them (defaults). In case of a default, the guarantor must compensate the lender or client, and usually acquires an immediate right of action against the principal for payments made under the guarantee.
A guarantor is a financial term describing an individual who promises to pay a borrower's debt in the event that the borrower defaults on his or her loan obligation. Guarantors pledge their own assets as collateral against the loans. On rare occasions, individuals act as their own guarantors, by pledging their own assets against the loan. The term "guarantor" is often interchanged with the term "surety.".
A guarantor is typically over the age of 18 and resides in the country where the payment agreement occurs. Guarantors generally exhibit exemplary credit histories and sufficient income to cover the loan payments if and when the borrower defaults, at which time the guarantor's assets may be seized by the lender. And if the borrower chronically makes payments late, the guarantor may be on the hook for additional interest owed or penalty costs.
Synonyms of Guarantor
Angel, Approver, Backer, Bailsman, Bondsman, Certifier, Confirmer, Cosignatory, Cosigner, Endorser, Godfather, Godparent, Guarantee, Guaranty, Insurer, Mainpernor, Mortgagor, Notary, Notary public, Party, Patron, Ratifier, Signatory, Sponsor, Subscriber, Surety, Underwriter, Upholder, Warrantor
How to use Guarantor in a sentence?
- I am listed as the guarantor on my sons student loans so every month I make sure he has paid the minimum amount due.
- Unlike a co-signer, a guarantor has no claim to the asset purchased by the borrower.
- Edward was a little uncertain about his partners in the deal and, as a result, encouraged to be working with a strong guarantor like Great North American First Allied Bank and Trust.
- The student wasnt able to purchase his first car without having a guarantor on his loan to ensure payments were made.
- The guarantor guarantees a loan by pledging his or her assets as collateral.
- The role of the police as guarantors of public order.
- A guarantor guarantees to pay a borrower's debt in the event that the borrower defaults on a loan obligation.
- A guarantor alternatively describes someone who verifies the identity of an individual attempting to land a job or secure a passport.
Meaning of Guarantor & Guarantor Definition