The concept of subrogation applies to the liability of a guarantor under a loan guarantee.Under the concept of subrogation

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Subrogation is when the guarantor who has compensated the lender takes over the right of the lender to sue the borrower. This means that the guarantor can then pursue the borrower for repayment of any amount that was paid to the lender on their behalf. It does not necessarily require the lender to attempt to collect from the borrower before pursuing the guarantor, although the lender may choose to do so.

The Concept of Subrogation Applies to the Liability of a Guarantor