Guaranteed Loan


DEFINITION of 'Guaranteed Loan'

A loan guaranteed by a third party in the event that the borrower defaults. The loan is quite often guaranteed by a government agency which will purchase the debt from the lending financial institution and take on responsibility for the loan.

BREAKING DOWN 'Guaranteed Loan'

This type of agreement is often made if the borrower is an unattractive candidate for a loan. It is a way for people in dire need of financial assistance to acquire funds, without putting excessive risk on the lending financial institution.

  1. High Ratio Loan

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  3. Financial Institution - FI

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  4. Default

    1. The failure to promptly pay interest or principal when due. ...
  5. Default Probability

    The degree of likelihood that the borrower of a loan or debt ...
  6. Loan

    The act of giving money, property or other material goods to ...
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