Skip to main content

Sign in

Enter your email and password below to access your account.

Not yet registered?

Do you have questions about what a guarantor loan is and how the role of a guarantor works? Let us help you break down the information and sort fact from fiction, with our guide on what you need to know about being a guarantor.

How does a guarantor loan work?

When you take out a personal loan, you agree to repay the lender the amount borrowed plus an agreed rate of interest as the cost of borrowing. With a guarantor loan, the person named as the borrower is responsible for paying the money back. However, if things don’t go well and they fall behind, the loan company can come to you as the guarantor and ask you to make the repayments.

Applying for a guarantor loan

applying for a guarantor loan

The process of applying for a guarantor loan differs between lenders but you’ll find lots of similarities across the board. Firstly, both borrower and guarantor will undergo a credit check. If the loan is granted, the money is usually paid into the bank account of the guarantor fairly quickly. It’s then up to the guarantor to transfer the money to the borrower. By doing so, it makes sure that the guarantor is aware of the loan and protects them against fraud.

Credit file

The loan won’t be recorded on the guarantor’s credit file unless called upon to take over the debt. If all goes well and the debt is consistently repaid according to the schedule, the borrower could boost their credit rating. This means they should have a wider range of credit options in the future. 


As a guarantor, you’ll usually be supplied with a copy of the borrower’s repayment schedule. From this point on, you’re only likely to hear about the loan if there’s a problem. Make sure you read the all-important terms and conditions of your agreement for details of why and when the lender would pursue you for repayment. Beware, if the borrower falls behind with their repayments and suggests paying a lesser amount or adjusting the payment period, the lender could deem them unable to pay and ask you to pay instead.

Would I qualify as a guarantor?

Many guarantor loan lenders simply ask for you to be aged over the age of 18 and under the age of 75 with the means to pay back the loan. Some ask that you’re over the age of 21 or that you’re a homeowner. Owning your own home isn’t a necessity though, it just means you’re more likely to qualify as homeowners are seen as being more financially stable. A good income is also seen as a plus.

The real deal breaker though is your credit rating. If you’re already connected to the borrower financially, either as their spouse or through something like a joint bank account or home ownership you won’t be accepted as a guarantor.

Try Money Matcher today

Guarantor responsibilities

responsibilities of a guarantor

If you’re thinking of being a guarantor, the borrower might be the nicest person you know, your oldest friend or the next door neighbour you’ve known for 20 years. But you’ll still want to have an open and honest conversation with them about their reasons for borrowing and how they plan to pay the money back.

If the person has struggled to get their finances in order, there’s a chance that some financial advice will avoid the need for a loan.

As part of the application process, you will undergo a credit check but the loan itself will not be detailed in your borrowing history unless you are required to take over the debt. If this does happen, you will be liable for the total outstanding debt, which could include additional late fees and charges. 

Can I stop being a guarantor for a loan?

You can only stop being a guarantor if you’re still within the cooling off period. This is usually set at 14 days. To withdraw from the agreement, you will need the borrower to hand back the full loan amount.

If you’re happy to lend a friend a financial hand through being a guarantor, you’ll want to know they’ve researched the market to find the best deals. Point them in the direction of our moneymatcher. Load it up with the key details and it will reveal a summary of guarantor deals that are a match to your needs.

Suggest you could have a downloadable step by step guide of the guarantor process here, that someone could print off and tick each box as they’ve completed each bit. It would include space for notes from research, the best deal you’ve found and any notes on conversations had between guarantor and borrower.

Try Money Matcher today