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What It Means To Be a Guarantor

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Being a Guarantor for someone with a poor credit score or no credit history allows them to access borrowing that they may not ordinarily be able to obtain.

In the case of a Guarantor Loan, it also enables them to rebuild their credit history so that they can access more mainstream forms of lending in the future.

Guarantor loans aren’t new – it’s how banks used to lend before computer credit scoring took over. It is a trust-based system, so it is important that the Guarantor has confidence and trust in the Borrower to make the repayments in full and on time.

It does mean that as the Guarantor, you are taking on a degree of responsibility for the debt and should the borrower not keep up with their payments you will be responsible for paying the debt. The loan won’t appear on the Guarantor’s credit record unless the loan defaults. As long as the borrower pays the agreement on time every month the debt will not show on the Guarantor’s credit report and as a result will have no bearing on their own credit rating.

The Citizens Advice Bureau recommends you ask yourself the following questions before deciding to be a Guarantor:

  • Why do they need a guarantor (do they have a poor credit history? Is it likely they will have problems making the payments?)
  • Is the borrower responsible enough to have a loan?
  • Is the loan a wise one (is it for something they really need, or could they just save up for it?)
  • Would you be willing and able to back the loan (plus debt recovery costs) if the borrower can’t or won’t?
  • What would you list as security, and are you willing to risk having it repossessed if the money can’t be paid back?
  • If in doubt, seek legal advice first.

A guarantor loan is an unsecured loan that requires a guarantor to co-sign the credit agreement. At application stage the Guarantor will go through the normal credit checks and may be asked to provide evidence such as bank statements and proof of ID. At TFS we always provide the Guarantor with a copy of the credit agreement, contract and tell them the loan term. You will also receive a copy of any notices sent to the Borrower during the term of the loan.

All TFS Loans Guarantors have to be UK Homeowners with good credit history. A family member or friend can be a Guarantor as long as they are not financially linked to the borrower (e.g. a spouse).

At TFS, in the event of a no-payment or late-payment from the Borrower, we will always try our best to contact the borrower first and resolve the issue with them. We only come to the Guarantor as a last resort, when all other avenues have been exhausted.

For more information on being a Guarantor visit: where you can find a range of frequently asked questions and answers. Or give us a call on 0203 476 6438.

TFS Loans offer Guarantor loans from £1,000 to £15,000 over a 12 to 60 month term.


Representative APR 44.9%, subject to status.

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Loans are subject to status and affordability. *Consolidating debts may increase the term and the total amount payable.

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