Does a personal guarantee cover interest and legal costs too?

A typical personal guarantee covers the principal plus accrued interest, fees and the lender’s recovery costs — not just the sum borrowed. Read the cap: an uncapped guarantee can exceed the original loan. Guarantee wording usually says “all monies” or “all sums due”, which pulls in interest, default interest, arrangement fees and legal recovery costs. So the exposure can climb above the original cost of borrowing once a default and enforcement are added.

Does a personal guarantee cover interest and

2 min read

PrincipalCovered

Interest & costsUsually covered

CapCheck for one

The full scope of a guarantee

Guarantee wording usually says “all monies” or “all sums due”, which pulls in interest, default interest, arrangement fees and legal recovery costs. So the exposure can climb above the original cost of borrowing once a default and enforcement are added.

Caps and limits

A capped guarantee limits your exposure to a fixed figure. Always confirm whether the cap includes or excludes interest and costs. Or avoid the question altogether with a no-personal-guarantee loan, where there is no personal exposure to cap.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Is my liability limited to the loan amount?

Only if the guarantee is capped and the cap includes interest and costs. Many guarantees are uncapped or exclude costs from the cap, so your exposure can exceed the original loan.

How do I check my exposure?

Read the guarantee for a cap figure and whether it covers interest, fees and recovery costs. A no-PG loan avoids the calculation because there is no personal exposure.