Guarantor

A guarantor is a person or institution who takes responsibility for another person's debt. in the agreement, the guarantor promises to pay off the debt if the person fails to do so, using his own assets if necessary. The most common example of a guarantor is the parent in a student loan: if the student fails to make repayments, his parents will be held liable. Guarantors are also commonly used by people who cannot secure a loan on their own, such as those with bad credit. Before taking on a borrower, guarantors will assess the person's financial capability and ability to handle the loan.