A promissory note guaranty may serve as added security to guarantee a personal loan. The third party who signs as guarantor then assumes full responsibility for the loan, should the original borrower(s) default.
An alternative would be to list the guarantor as co-borrower or co-signor on the promissory note itself, where all parties signing the Note can be held jointly and severally responsible.
The Guaranty template on this page is for a specified loan amount, as opposed to guaranteeing an ongoing credit facility.
You could also secure a loan by offering property or goods as collateral. The applicable document for that is a Security Agreement which you can also download for free from our site.
A promissory note guaranty cannot be canceled, assigned or terminated by the guarantor until all debt has been paid in full. A release of guaranty should be issued by the lender upon full and final settlement.
Review the guidelines and additional legal information before using our sample legal documents. Please note that they are provided for informational purposes only and should be reviewed by an attorney in your jurisdiction.
Follow this link to access free promissory note forms and guidelines for their use.
1. Whereas the Borrower executed a Promissory Note in favor of the Lender on the ______ day of _________________20____ in the principal amount of $________(____________________________). In consideration of this above mentioned Note and as inducement to the Lender to extend a loan to the Borrower, the Guarantor hereby unconditionally guarantees the performance of the Borrower under the terms of the Note.
2. The Guarantor acknowledges that he/she has full knowledge of the principal amount, interest charges and late payment fees as well as the additional terms and conditions as set out in the Note.
3. Upon default by the Borrower the Guarantor shall assume full responsibility for the repayment of the loan and the Lender shall not be obliged to seek recourse against the Borrower prior to enforcing his /her rights under this Guaranty. The Guarantor further undertakes to pay the Lender upon written demand and within seven (7) days of receipt thereof all monies due and not paid by the Borrower.
4. The Guarantor agrees to remain fully bound until all monies due under the Note have been paid in full and waives all rights of subrogation and set-off. The Guarantor further waives all defenses based on suretyship or impairment of collateral.
5. In the event of default by the Guarantor, all reasonable legal fees, collection and enforcement charges to the extent permissible by law, in addition to other amounts due, shall be payable by the Guarantor.
6. No relaxation, indulgence, waiver, release or concession extended to the Borrower by the Lender and no delay or omission in the enforcement of payment or exercising of any of the Lender's rights shall affect the liability of the Guarantor under this guaranty.
7. This guaranty shall be binding upon and accrue to the benefit of the parties, their successors, legal representatives and assigns.
8. This guaranty shall be construed, interpreted and governed in accordance with the laws of the State of _______________ and should any provision of this guaranty be judged by an appropriate court of law as invalid, it shall not affect any of the remaining provisions whatsoever.
Signed at ________________ on this _______ day of _____________________20___.
Guarantor Signature: _________________________________ who warrants his/her full authority to enter into this guaranty.
Signed in the presence of:
(1) Witness Name _____________________________
(1) Witness Signature __________________________________
(2) Witness Name _____________________________
(2) Witness Signature __________________________________