DEFINITION of 'Avalize'

The act of having a third party (usually a bank or lending institution) guarantee the obligations of a buyer to a seller per the terms of a contract such as a promissory note or purchase agreement. The bank, by "avalizing" the document (usually "by aval" will be written on the document itself), acts as a cosigner with the buyer in the transaction.


To avalize means "to give one's accord". It is a rarely used but is an effective method of securing the rights of the receiving party in the transaction. This is an obligation that a bank will only take on with lucrative customers. It is seen as an act of good faith by both parties.

  1. Guarantor

    A person who guarantees to pay for someone else's debt if he ...
  2. Default

    1. The failure to promptly pay interest or principal when due. ...
  3. Aval

    A guarantee added to a debt obligation by a third party who is ...
  4. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities ...
  5. Default Risk

    The event in which companies or individuals will be unable to ...
  6. Remittance

    The term most commonly refers to money being sent via mail or ...
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