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A guaranteed loan is used by borrowers with poor credit or little in the way of financial resources; it enables financially unattractive candidates to qualify for a loan and assures that the lender won't lose money. Guaranteed mortgages, federal student loans, and payday loans are all examples of guaranteed loans.
It's a contract between guarantor and a creditor that obligates guarantor to pay the debt of the borrower if that borrower defaults.
A loan guarantee, in finance, is a promise by one party (the guarantor) to assume the debt obligation of a borrower if that borrower defaults. A guarantee can be limited or unlimited, making the guarantor liable for only a portion or all of the debt.
A guarantor on a mortgage is the person who provides the additional security for your home loan. Most lenders prefer the guarantor to be a close relative ? usually a parent, grandparent or siblings. Your guarantor doesn't need to provide any cash payment. No money changes hands with a guarantee.
Guarantee is both a verb and a noun. Guaranty is a spelling variant for the noun, used in certain legal contexts. I can guarantee that Vicky will be back here within the week. What guarantee (or guaranty) can you offer to the other parties?
By guaranteeing the agreement, you become responsible for any arrears that occur. Before you agree to be a guarantor, it's very important to check both you and the renter or borrower really can afford to keep up with all the repayments.