What is Guarantor?
A guarantor is a person who promises to accept financial responsibility for another person's debt or performance of an obligation if the other person should fail to do so. Generally, a guarantor provides this promise in writing and by signing a guarantee agreement or pledge of collateral. A guarantor may be asked to agree to pay the debt of someone else if that person is unable to make payments or fulfill their obligations.
Who can become a guarantor?
Anyone who is over the age of 18 and has the financial means to do so can become a guarantor. To become a guarantor, a person must typically meet certain requirements set by the lender or creditor. These may include having a good credit score, a stable income, and sufficient assets to cover the debt if necessary.
How does someone become a guarantor?
Before becoming a guarantor, it’s important to make sure that you understand the legal implications, including the potential for financial responsibility. Generally, someone becomes a guarantor when they explicitly agree, usually in writing, to accept full financial liability for another’s debt or other obligation if that person defaults on their payments or fails to honor their contractual terms. As such, it is essential to know the debtor's background and credit history, as well as any external factors that could affect their ability to fulfill their obligations. This can help provide assurance that you are making the right decision and taking on minimal risk.