A personal guaranty is used when a lender, creditor, or vendor requires additional reassurance of payment from a person before agreeing to make a loan or extend credit to another person. In this personal guaranty, a person (called a guarantor) promises to be personally responsible for repaying a loan in the event the debtor fails to pay. For example, a parent could agree to provide a personal guaranty for a student loan made to his child, or a business owner could provide a personal guaranty to a vendor for extending credit to his business.
This is a personal guaranty in which a person (called the “guarantor”) agrees to be personally responsible for paying off a debt if the debt is not paid back to the lender by the debtor.
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