surety
A surety is a person or entity that assumes direct liability for another’s obligation . Financial creditors may require the debtor to find a surety, who then signs the loan agreement along with the debtor. A financial surety’s liability arises as soon as the agreement is closed. Sureties are commonly used in legal, financial, and contractual contexts, such as in surety bonds , to ensure compliance with agreements and obligations. Although similar to a guarantor , a financial surety's liability arises as soon as the agreement is closed.
[Last reviewed in June of 2024 by the Wex Definitions Team ]
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