Guarantee Agreement Template
What Is a Guarantee Agreement?
A Guarantee Agreement is an official pledge listing a third party (known as the guarantor) who will ensure payment of a debt will be fully repaid to the creditor. With a Guarantee Agreement Form, the guarantor can agree to limited or unlimited liability.
- Personal Guarantee Agreement.
A Guarantee Agreement can come in many forms depending on the degree of responsibility the guarantor will have. These include:
- Absolute Guarantee. The creditor will have no restrictions when it comes to seeking repayment from the guarantor if the borrower fails to make a payment.
- Conditional Guarantee. All parties must agree to conditions that will need to be met before the guarantor will be held liable for the borrower's repayment. A creditor cannot automatically request payment from the guarantor based solely on default by the borrower.
- Payment Guarantee. A guarantor will agree to a fixed date for payment obligation if the borrower fails to make a payment.
- Collection Guarantee. The guarantor assures the creditor that the debt will be paid in full after all efforts have been made to receive payment from the borrower.
You can download a printable Guarantee Agreement template through the link below or create your own document using our online form builder.
How to Make a Personal Guarantee Agreement?
You will want to include the following information in your Personal Guarantee Agreement:
- The date the agreement will be finalized and signed by all parties.
- A guarantee and indemnity section that will feature the following:
- The terms for each party regulating how the loan will be repaid to the creditor;
- An agreement by the third party to fulfill the repayment of the debt taken on by the borrower, depending on the type of guarantee;
- Any allowances of missed or late payments due to unforeseen circumstances on behalf of the borrower (such as loss of employment, serious injury, etc).
- Guarantor's liability. This is the section of the Personal Guarantee Agreement that will discuss in detail the duties the guarantor will need to fulfill should the borrower be unable to repay the debt owed. You will want to include language that lays out situations that would leave the guarantor unable to repay the debt (such as injury, incapacity, or failure of the creditor to hold up their end of the agreement).
- The length of time the borrower will have to repay the creditor for the loan amount.
- Any alterations or amendments the creditor may wish to make prior to the final signing.
- The obligation of the guarantor to provide any information needed relating to their finances when requested.
- Confidentiality agreements to maintain the privacy of each party and to not divulge the information in the agreement to outside parties for publishing or any other business matter not pertaining directly to the Personal Guarantee Agreement.
- Arbitration instructions and location of where the arbitration would take place.
- Applicable laws pertaining to the agreement.
Be aware that you will need to adjust the language of the Personal Guarantee Agreement template for employment, real estate, or financial transactions.
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Download Guarantee Agreement Template