A Personal Guarantee is a document that expresses a written promise by a guarantor to take responsibility for a debtor if they fail to pay their debt to a lender. The purpose of this guarantee is to ensure the lender that the loan will be paid back. Even if the debtor won't be able to pay it back, the guarantor is taking responsibility for their loan.
A Personal Guarantee is often used in situations when a debtor does not have a good credit history, or its length is not sufficient. The guarantee can be accompanied by other documents, such as Personal Guarantee insurance. A guarantee similar to this is known as a Corporate Guarantee. This kind of guarantee deals with an entity instead of an individual.
Personal Guarantee insurance provides insurance coverage for those guarantors, who have signed the Guarantee. The circumstances depend on the terms and conditions of the insurance, however, the insurance is designed to cover part of the liability upon the signed guarantee, in case a guarantor won't be able to pay back the loan with the debtor and would not want to lose any personal assets. You can download a Personal Guarantee template through the link below.
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