Warranty

Last Updated: Jun 7, 2019

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A warranty is a type of guarantee that a manufacturer or similar party makes regarding the condition of its product upon the sale of the product. It also refers to the terms and situations in which repairs or exchanges can be made in the event the product does not perform as intended. When making a loan, it is important to understand the borrower's warranty program if applicable. Look to see how much the borrower has reserved for warranty exposure and the historical payouts on these warranties.