Guarantor
Also called: surety
A person who promises a lender to pay the debt if the borrower does not. In law the guarantor is called the surety, and their liability is generally the same as the borrower's.
A guarantee involves three people: the borrower (principal debtor), the lender (creditor) and the guarantor (surety). The guarantor promises the lender that if the borrower defaults, the guarantor will pay.
The law behind it
Section 126 of the Indian Contract Act, 1872 defines a contract of guarantee. Under Section 128, the surety's liability is co-extensive with that of the principal debtor, unless the contract says otherwise. The lender can usually proceed against the guarantor without first suing the borrower.
When a guarantor is released
- If the lender and borrower change the terms of the loan without the guarantor's consent (Section 133).
- If the lender releases the borrower, or does something that discharges the borrower (Section 134).
- If the lender makes a binding arrangement to give the borrower more time or not to sue, without the guarantor's consent (Section 135).
- A continuing guarantee can be revoked for future transactions by notice to the lender (Section 130).
Rights after paying
A guarantor who pays steps into the lender's shoes and can recover from the borrower, including against any security the lender held (Sections 140 and 141).
Think first
Standing guarantor can affect your own credit record and your ability to borrow. Ask for the loan papers and keep track of repayment.
Draft a guarantor agreement or a personal guarantee letter. Compare with an indemnity bond.
Checked against the sources below on 7 November 2026 IST. General information about Indian law, not legal advice for your case.
Documents that use this term
Guides that explain more
- Default Bail Under BNSS Section 187: When Police Miss the Deadline
If the police do not file a charge sheet within 60 or 90 days of remand, the accused gets a right to bail that does not depend on the merits. The right is lost if it is not claimed in time.