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A party who will guarantee repayment or performance of a covenant.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


A third party who promises to provide payment on a bond, loan, or other liability in the event of default. While many guarantees apply to debt instruments, they may also be used for day-to-day expenses. For example, a parent may be a guarantor for an adult child and promise to pay rent to a rental agency if the adult child does not do it. Banks often serve as guarantors on behalf of certain clients, but, just as often, private parties serve as guarantors and promise payment on private loans. Guarantors reduce the risk to loans and liabilities, and usually improve the credit agency ratings of bonds.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


If lenders are concerned about your income, your credit history, or other risk factors when you apply for a loan, they may require a guarantor, or cosigner.

The guarantor signs the loan with you and agrees to pay your debt if you default. For example, lenders may fear that your income may not be high enough to meet your payments if you encounter any unexpected financial setbacks.

Laws governing who may serve as a guarantor vary from state to state. Some states require that your guarantor be a resident of the state where you're obtaining the loan, while others will accept guarantors from out of state as well.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
27, 2017), https:// 145fl 5 .american-economy-part-i-consumer-demand-for-credit/ ?utm_term=.510c93cab79c (describing the most recent amendments to the ECOA which does not include an addition of guarantors to the definition of applicant).
For example, the guarantor should attempt to remove "common law" and workplace statutes from the definition of "Environmental Laws."
This is expected to galvanise the guarantors into exerting moral pressure on the defaulters.
A spokeswoman for Related did not immediately confirm whether the company accepts international guarantors. Brodsky did not respond to requests for comment.
Abdullah Al-Omair, another guarantor, says the fear about the hostile reaction of many borrowers force a large number of people to act as guarantors even though they know they may become victims of cheating.
The guarantor is nearly always a close family member such as a parent or grandparent and it is not unusual for lenders to insist that there must be a family connection.
Asked about claims by Greek Cypriot newspapers that three guarantor states, Turkey, Greece and the United Kingdom, would hold a tripartite summit on the issue of security, President Talat said, "we cannot object it.
When asked how likely it is CULS would be able to recover the $40 million from real estate investors, Morganfield said, "We intend to aggressively pursue our remedies under the ruling but cannot predict the outcome at this time." The next step is for the bankruptcy court to enter a final judgment against the guarantors, which should happen sometime the week of Feb.
Giving guarantors a greater responsibility in default prevention is a much better use of taxpayer dollars, with better outcomes all around: better credit and overall financial wellness for borrowers; lower cohort default rates and more financially stable alumni for schools; government savings on default costs; and a well-educated, more fiscally secure workforce.
As the capital markets become more comfortable with the underlying risks, the need for financial guarantors may decrease.
Why can't a certified chemist be a guarantor? I am fortunate that my daughter-in-law is principal Of a high school, so I have a guarantor in the family.
Kuchma in a statement urging him to firm leadership and an "examination of conscience." "When the president as guarantor of the Constitution does not fulfill his responsibilities, the guarantors become the people who go out into the central squares to lay claim to the truth," read the statement, which also charged the government with "criminal and anti-constitutional acts."