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Glossary term

Guarantor

Definition

A guarantor is someone who agrees to step in and repay a loan if the main borrower can't.

Technical definition

A guarantor is a party who contractually assumes responsibility for a borrower's debt obligation in the event the borrower defaults.

Why it matters

A guarantor can help a borrower qualify, but the guarantor takes on real obligation — so both sides should understand the commitment.

Example

A family member might act as guarantor to help a beginning farmer secure financing.

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