Personal Guarantee

A personal guarantee is a commitment made by an individual to repay a loan or debt if the primary borrower defaults. Lenders often require personal guarantees when issuing loans to businesses or individuals with less established credit. By signing a personal guarantee, the guarantor agrees to be personally liable for the debt, which can include their personal assets. 

Personal guarantees reduce the lender’s risk and ensure an additional layer of security in case of non-payment.