Answer:
Security arrangements
Explanation:
Security arrangements is an arrangement in which a third party promises to be primarily liable with the borrower for the payment of the borrower's debt.
It requires that borrower issue a security or a letter of credit.
It is different from a guaranty arrangement in the sense that while security arrangement is primarily liable guaranty arrangement is secondarily liable.
Answer:
The correct answer is: Surety.
Explanation:
Surety is a contract signed between three parties: the borrower, the lender, and the surety. These contracts are typically signed when the borrower does not fulfill certain credit requirements, thus, the borrower requires a surety as the grantor of the debt instrument. In such cases, the lender reduces the risk of a non-paid debt and tends to lower the interest rate in favor of the borrower.
