What is a Guarantor Loan?
If you have a poor credit history but require a loan, then a guarantor loan can be useful. Similar to a standard unsecured personal loan, a lender will give you a loan provided you can get someone to ‘guarantee’ that the loan will be repaid – if not by you, then by the guarantor themselves.
Some of the biggest guarantor lenders include:
- Amigo Loans
- UK Credit
- Talk Loans
- Buddy Loans
- George Banco
Who Can Be a Guarantor?
Different lenders may have different criteria as to who can be your guarantor, however in general, anyone can be a guarantor for a loan as long as it’s not your husband/wife. A friend, family member or even a (very nice) work colleague, can do so, they must be aged 21-75 and have a good credit history.
Are Guarantor Loans a Good Idea?
In the right situation a guarantor loan can be a (literal) lifesaver, however you must be acutely aware that if you fail to repay the loan, it is not only yourself that you are getting into trouble. If you fail to repay your loan, then the pressure will fall onto your guarantor, which can not only affect their credit, but also your relationship with them.
Can a Guarantor Loan be Part of a Debt Solution?
Depending upon your particular situation there may be options, however in general, guarantor loans can not be included in debt solutions as the guarantor will be affected.
It can be difficult to get help with guarantor loans (although there are options), as this will affect the guarantor. If you are struggling, talk to the lender directly and explain to them your situation.