Guarantor

A guarantor undertakes that he will repay a debt incurred by another person or company to a bank or other creditor and the bank or other creditor can require him to pay the outstanding amount if that person cannot or will not pay their indebtedness. Proprietors and directors of companies are often asked to give personal guarantees for their company's borrowings to provide additional security. A bank will commonly require the guarantee to be secured, for example a mortgage over a director's house. In the case of co-guarantors each guarantor will be fully liable for the outstanding amount - it is up to guarantors to resolve their respective obligations between themselves.