‘What does it mean to be a guarantor?’ Many approached by a friend or family member to be a guarantor may ask themselves this question. Being a guarantor has a lot of responsibility that comes with it, but it’s a great way of helping out someone in need of a loan – when they can’t secure credit from banks or high-street lenders. If you’re looking for information on what it means to be a guarantor, you’re in the right place. Our video will explain everything you need to know about becoming a guarantor.
Being a Guarantor is a great way to help a friend or family member who has a poor credit history or no credit history, to take control of their finances and get back on track with their financial goals. If they have been refused a loan by their banks or other online or high street lenders, a Guarantor loan can be a great option. Guarantor loans help to rebuild someone’s credit history so that they can access more mainstream forms of lending in the future.
However, it is important that as the Guarantor you are confident that the Borrower will meet their regular monthly payment obligations so that you are not left in a position where you have to cover a shortfall of the loan. You would be co-signing the credit agreement, so you would be responsible for the debt if the borrower didn’t pay. The loan won’t appear on your credit record or have any bearing on your credit rating unless the loan defaults.
The Citizens Advice Bureau recommends you ask yourself the following questions before deciding to be a Guarantor:
If you decide you do want to be someone’s Guarantor there are five things that we ask you to be:
At the application stage as Guarantor you will go through the normal credit checks and may be asked to provide evidence such as bank statements and proof of ID, but in most cases, this isn’t needed.
We always provide the Guarantor with a copy of the credit agreement, contract and tell you the loan term. You will also receive a copy of any notices sent to the Borrower during the term of the loan.
We always lend on the basis of the Borrower’s ability to pay back the loan. This limits the risk for you as the Guarantor. We also ensure we always contact the Borrower to repay the amount. We only involve the Guarantor if there is a shortfall which the Borrower can’t or won’t pay.
Before you decide to be a Guarantor please visit our Frequently Asked Questions for Guarantors on our website tfsloans.co.uk/faq/guarantor. Please feel free to call us if you wish to discuss anything – 0203 476 6438.
48.9% representative APR.
Youtube Link: https://www.youtube.com/watch?v=bR_ZtsjYNRM
Loans are subject to status and affordability. Consolidating debts may increase the term and the total amount payable.
Before entering into any credit agreement please make sure you can afford the monthly repayments, we recommend that you seek independent advice if you are unsure of any of the terms of our agreement. There may be other taxes or costs, not paid through us or charged by us, that you have to pay in connection with the agreement.
Late repayments can cause you serious money problems. For help go to www.moneyadviceservice.org.uk