A guarantor loan like an unsecured loan but requires you to take out the loan with another person.
From £100 to £10,000.
Good and bad credit history accepted.
No hidden costs or fees.
Your loan could be paid out in under an hour.
Quick and simple form.
Compare Guarantor Loans
Are you dealing with unexpected expenses? Have you had trouble getting a loan due to poor credit? Then maybe it is time to consider a guarantor loan.
Quick & easy form
Our simple form takes about 2 minutes to complete and is 100% secure.
Representative 99.8% APR (fixed). Representative Example: If you borrow £500 over 52 weeks at a Representative rate of 99.8% APR and an annual interest rate of 99.8% (fixed), you would pay 52 monthly instalments of £13.41. The total charge for credit will be £197.32 and the total amount payable will be £697.32.
What is a guarantor loan?
A guarantor loan like an unsecured loan but requires you to take out the loan with another person. This person will be responsible for paying the debt if you are unable to do it. This second person is called the guarantor.
Guarantor loans are another type of loan for anyone who has not previously borrowed or those who have bad credit. This type of loan makes it easier for people who are in financial difficulties and need funds to take care of unexpected expenses. While this is true, the guarantor must have a good credit score and be able to show they can pay the loan if you cannot.
The guarantor loan is a legally binding contract for both you and the guarantor. For this reason, it is especially important to give careful thought to this before signing the loan agreement.
Having a guarantor on the loan is a way that lenders lower the risk of the loan defaulting. The guarantor is used to add strength to the loan application. Lenders are reassured the loan will be paid off.
Considerations for guarantors
Becoming a guarantor is profoundly serious. There are some things you should consider before agreeing to become a guarantor:
- Can you repay the loan if the borrower is not able to?
- Will you have enough funds for your own unexpected/expected bills?
- Are you comfortable providing personal data for the application process?
If you are not able to pay the loan, then your own credit score will be affected. So, if you are not comfortable with being a guarantor, or will not be able to repay the loan, then it is best to not agreeing to be the guarantor on a loan.
Guarantor Personal Loans FAQs
How Does a Guarantor Loan Work?
A guarantor loan requires the borrower and the guarantor to fill out an application for this financial product. The first part of the application deals with the borrower’s financial situation, while the second part of the application is about the guarantor’s financial information. Once the application has been filled out, then the financial history of the guarantor and the lender are linked together. The guarantor’s application supports the borrower.
If the borrower fails to repay the loan, the guarantor is legally bound to repay the loan. For this reason, the guarantor must sign a Guarantee and Indemnity are required by the Consumer Credit Act 1974. This must be signed, which means the guarantor has read through the document and understands they are legally bound to accept responsibility for the repayment of the loan if the borrower defaults.
Next, the lender runs individual affordability assessments on the borrower and the guarantor. With a guarantor loan, the lender usually runs a hard credit check before making a final decision to grant the loan. The reason they do this is to show responsible lending policies to the regulator. Lenders will not give a loan to anyone who is not able to guarantee they can repay the loan.
If the loan is granted, then payments are collected through continuous payment authority. This works to charge your debit card for each month’s loan payment. The loan is paid automatically on a specified day each month. So, you do not have to worry about making the payment.
In fact, there is no need to call the lender each month or even make a manual payment online. The payment is automatically done, which make things much easier for you. All you must do is ensure there are enough funds in your bank account each month to cover the loan repayment.
How to Compare Guarantor Loans on Our Site?
Our site makes it fast, secure, and easy to compare guarantor loans. Our lending partners are some of the best and our application process lets you know exactly which lenders may accept your application.
After filling out our secure application form, we send your information to our lending partners. These are partners who offer guarantor loans, short term loans, unsecured loan, debt consolidation loans, and who offer credit line products.
Once our lenders have reviewed your application, they let us know if they would accept your application. Then we can show you a list of lenders who may be able to help you. The results will be ordered from the cheapest products to the more expensive.
Here are the simple steps you need to apply for a guarantor loan:
1). Choose the amount of the loan you require.
2). Select the term of your loan.
3). Click the “Get Accepted” button.
4). Fill out the secure form, which takes only a couple of minutes.
5). Compare lenders who have accepted your application.
6). Choose the cheapest product and finalize your application with that lender.
7). That is, it! You can be confident that this is the most secure online site to find a loan that fits your needs.
What is the Best Guarantor Loan?
We are not able to recommend any specific loan product or lender. This is because each lender will consider your guarantor loan application on an individual basis. Each lender has their own products. It also depends on your credit history, as well as your guarantor’s. What may raise a red flag in your credit history for one lender may not be a problem for another.
All we can advise you here is to find a good guarantor and then fill out an application. Then we can show you if any of our lending partners may accept your offer.
Are there Alternatives to Guarantor Loans?
Yes! There are some alternatives you may want to consider. If you are not able to find a guarantor and you need some alternative to a guarantor loan, then here are some alternatives to consider:
Credit line products: finance companies offer a revolving line of credit, rather than a traditional loan.
Peer-to-peer loans: these are niche lenders who partner with individuals to provide loans and funding. In this scenario, rather than borrowing from a traditional lender, you work with a third-party platform. You may still need to go through a credit review, but you may have a better chance of obtaining a loan here. Keep in mind that you will still have to repay the loan and the loan arrangements differ from organization to organization.
Credit unions: may be more willing to overlook poor credit than a traditional lender. However, in most cases you will first need to become a member before applying for a loan.
Bad credit loans: these are loans for those who do not have much of a credit history, as well as those who have bad credit. This type of loan tends to be more expensive than a guarantor loan.
Payday loans: this is a type of loan that provides you with funds until your next payday. These also tend to be more expensive and you will need to pay them back in full on the next payday. Payday loans can be dangerous if you are not able to pay them—they sometimes put people deeper into debt.
Credit cards: this is another alternative that is available if you are unable to obtain a guarantor loan. Credit cards can help improve your credit history if you pay them off on time every month.
How to Get a Guarantor Loan?
To obtain a guarantor loan, you will first need to have a guarantor. While it is true almost anyone can be your guarantor, it is usually best to have a family member. These can include your spouse, parents, a sibling, and more. If that is not possible, you can have a friend or colleague act as the guarantor on the loan. However, make sure to choose someone you can talk to honestly about your financial situation.
Your guarantor should be someone who can improve your financial standing for the loan. This means your chosen guarantor must have good credit. They also need to have a job and earn regular income. Another helpful point, which is not required, is that they own property in the UK. Lenders tend to look at property owners as being more creditworthy. Lenders will consider a guarantor who is not a property owner, but the rate of the loan may be higher.
There are a few requirements guarantors must meet to be included on the loan:
- They must be over 21
- Must have a UK bank account
- Have good credit
Are guarantor loans a good idea?
Yes, they can be an excellent way to get a loan if your credit history is poor. Plus, reputable lenders will not grant a loan if you and your guarantor do not have good credit. While that can be hard, it means you will not be responsible for a debt you and your guarantor may be unable to pay.
Taking out any type of loan comes with risks. The main risk is a major change in your finances, which make it impossible to repay the loan. In that case, your guarantor will be held responsible for the loan.
If you or your guarantor run into problems repaying the loan, then we recommend speaking with the lender as soon as possible. They may be willing to work with you to find an arrangement that works to repay the loan. This is much better than defaulting on the loan all together.
Does guarantor have their credit checked, too?
Yes, the guarantor and the borrow will have their credit checked during the application process. When using our initial application process, your credit will be soft checked, as well as the borrower’s.
Is there an income requirement for the guarantor?
No, there is not a basic requirement of how much the guarantor earns. However, what does matter is that they have a job and a steady income. The total of their income, after tax, must be enough to care for their own expenses, as well as leave enough disposable income to cover repayment of the loan.
In addition, many lenders require the guarantor to have extra income each month, which is on top of what they need to pay for their bills and the loan payments.
Can a guarantor have bad credit?
Yes, but lenders will feel the risk of granting the loan is too high if the guarantor has bad credit. In that case, the loan probably will not be granted.
If you are thinking about becoming a guarantor, it is best to first improve your own credit history first. The borrower needs a guarantor who has a good credit history.
Can a guarantor be retired?
Yes, that is possible. However, they will still have to show they have regular income from their pension and/or other sources. A retired person will be treated the same way as any other guarantor.
The lender will want to make sure the retiree is able to repay the loan if the borrower is unable to pay.
Is it possible to stop being the guarantor?
Yes, there are four specific ways you can pull out of the loan as a guarantor:
1). Within 14 days of taking the loan, you and the borrower decide you no longer want the loan. In this case, the funds must be returned, and the agreement canceled. After 14 days, it will be up to the lender to decide.
2). The borrower pays off the loan early.
3). You pay the loan off early for the borrower.
4). The lender goes out of business.
However, in most cases, once you have signed the Guarantee and Indemnity, then it is not always possible to stop being the guarantor on the loan.
What if the guarantor cannot pay the loan?
If the guarantor’s financial situation has taken a dramatic turn, and they are not able to repay the loan, then lender usually contacts you (the borrower) and the guarantor. They will try to work out a solution that allows you and/or the guarantor to repay the loan.
If the loan is still not repaid, the lender will have to start legal proceedings. They may also try to recover the funds by accepting collateral as a form of repayment. This, however, is not quite common.
If the guarantor can pay, but refuses, then this is a breaking of the terms of the agreement. The lender may then take legal action.
Are there disadvantages of a guarantor loan?
The main disadvantage is that you will need to find a guarantor. For this reason, we recommend turning to someone with whom you can be completely honest and open. Let them know your precise financial situation and then see if they are willing to be the guarantor.
When considering a guarantor, be sure to keep in the requirements a guarantor must meet (listed above). And be sure to choose someone who has a job, steady income, and a good credit history. These factors could rule in your favor when it comes to getting a loan.
Can guarantor loans affect credit rating?
As the borrower: if you are unable to repay the loan and it goes into default, then your credit score will be dramatically affected. A bad credit score will likely make it more challenging to get any type of loan or other financial product in the future.
As the guarantor: being the guarantor will not affect your credit score. However, if the borrower fails to repay the loan, and you are not able to repay the loan and it defaults, then this will show up on your credit report, too. Your credit score will drop due allowing the loan to default.
What if I do not have a guarantor?
If you are not able to find a guarantor, then you may consider alternative financial products such as bad credit loans, short term loans, payday loans, credit unions, credit lines, or a credit card.
Is it possible to have two guarantor loans?
Yes, you can have two guarantor loans. It is also possible for one person to be the guarantor on two different loan agreements if they can afford to pay off these loans.
If the guarantor is not able to cover the cost of their own expenses, as well as repay both loans, then there is a particularly good chance the loan application will be rejected.
Get a Guarantor Personal Loans Quote Today
✔ Borrow from £300 to £10000 ✔ Choose between lenders who have accepted your application. ✔ Absolutely no fees, ever.