What is the difference betwwen Letter of Credit and Letter of Guarantee ?????

Answer 1

Originally, a Letter of Credit (LC) was quite literally that

- a letter addressed by the buyer's bank to the seller's bank stating that they could vouch for their good customer, the buyer, and that they would pay the seller in case of the buyer's default.

A letter of guarantee is usually issued to confirm that a stock or property is indeed owned by the seller & will be delivered upon closure of the deal.

Source:
http://financial-dictionary.thefreedictionary.com/Letter+of+Guarantee

regards,
Philip T

Answer 2

A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

Letters of credit:::::
Letters of credit are often used in international transactions to ensure that payment will be received. Due to the nature of international dealings including factors such as distance, differing laws in each country and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade. The bank also acts on behalf of the buyer (holder of letter of credit) by ensuring that the supplier will not be paid until the bank receives a confirmation that the goods have been shipped.