What is the role of a guarantor in a financial agreement?

The role of a guarantor in a financial agreement is to provide an additional layer of security for the lender. Specifically, a guarantor is a person who promises to fulfill the financial obligation of the borrower if the borrower defaults on their loan. This means that if the borrower is unable to make the required payments, the guarantor is legally obligated to step in and cover those payments.

Having a guarantor is often a way for individuals with less-than-ideal credit histories or insufficient income to secure a loan, as the presence of a guarantor reduces the lender's risk. The lender has a greater assurance that the loan will be repaid either by the borrower or, in the event of default, by the guarantor.

In this context, the other choices do not accurately describe the function of a guarantor. For instance, a person who benefits from another's loan does not guarantee repayment, while someone who makes a one-time deposit does not have a financial obligation tied to loan repayment. Additionally, a party that enforces the terms of a loan is typically the lender or a financial institution, not a guarantor. Thus, the role of a guarantor is specifically about promising to pay if the borrower defaults, making the correct answer clear.