Should I get a Guarantor Loan?

A guarantor loan is a way that some people can improve their chances of being able to borrow. It will allow them to be able to borrow money when perhaps they cannot normally because of having a poor credit record. They nominate a guarantor who does have a good credit record and who will be able to cover the cost of their repayments for them. It can still be quite an expensive way to borrow money but it provides an option for someone who would otherwise not be able to borrow money. It is well worth thinking about whether it is worth getting this sort of loan though.

Should I get a loan

The first question that you should ask yourself is whether you should get a loan at all. Borrowing money is a big decision and we need to be sure that it is the right one for us. Not only is it expensive but it can be restrictive as we have to make loan repayments each month and therefore make sure that we have enough money in order to be able to do this. If you have decided that a loan is the best option for you and you have eliminated other options such as using savings, waiting and saving up, going without the item and things like this, you will be ready to think about which loan will be the best one for you.

Is a guarantor loan right for me

A guarantor loan is designed for those with a poor credit record and so if you do have a good credit record then it might not be the most suitable. You might find that other loan options will be less complicated to organise and cheaper as well. Do make sure you look at all of your options and see which might be available to you.

You will also need to find a guarantor. This is someone that will be willing to make repayments for you if you miss any. You will obviously need to know them pretty well and they will need to be prepared to help you out when needed. They will also need to have a good credit record themselves as this will be checked.

What about the guarantor?

Finding the right person to be your guarantor can be tricky. You may know people that have a good credit record and will help you out but this does not mean that they would be prepared to be a guarantor on a loan. It is important to have a discussion with them about it so that they understand what the role requires.

You will also need to have a think about what might happen if they do have to make a repayment for you. Will they be happy to cover the cost of that or will they expect you to repay them. If they do expect a repayment when will they want it? Will they want it to be after the loan is paid off, as soon as possible or some other time. It is good to make sure that you have a long chat about this. You should even bring up what might happen if you repay none of the loan and they have to pay it all. They also need to be aware that they will not just be paying a repayment for you but also any fees associated with this. Guarantor loans do have fees associated with missed repayments which may have to be paid by the guarantor.

It is also important to think about whether using someone as a guarantor might affect your relationship with them. They might assume that you will be able to pay the loan back and if you do miss a payment and they have to pay it then they might get annoyed with you. It could mean that they cannot afford to buy things that they need. It may also cause jealousy in the family if some members know that you have got this arrangement with the person and they perhaps wish that they had it.


So getting a loan like this can be quite complex. As well as the usual consideration with loans such as the cost and whether you can manage the repayments, you also have to think about the guarantor. Consider who you might ask and whether they will be willing to help you. Think about what they will be able to afford and whether they will be the right person to use. You need to consider what might happen if they do have to make a repayment or more than one and how that might affect your relationship with them and with other people as well. It can be a trickier decision than when taking out a standard loan so you need to be prepared for that.

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