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What you need from a Guarantor?In simple words, a guarantor is a person known to the borrower personally, and is willing to guarantee the borrowers’ ability to repay the loan. A guarantor must:
- Be a homeowner or tenant
- Be receiving a regular income that is sufficient to afford the repayments of the loan if required to
- Have good credit history
- Be at least 21 years of age
- Have an active bank account
Prior to asking someone to stand as guarantor for your guarantor loan application, it’s worth checking that the person you have in mind would meet the criteria required by the lender. GuarantorMyLoan is a Guarantor Loan specialist, and this means your application must be supported by an eligible guarantor to be successful. See What is guarantor my loan?
What does my guarantor do? The guarantor will be required to make the monthly payments if the borrower is unable to. It’s important to find the right guarantor who can do this. If on the rare occasion that a payment cannot be made, we will contact your guarantor to make up any arrears on the account. If you pay in full and on time your Guarantor will never be contacted. And remember, if the first 12 repayments are made on time and in full, your guarantor will receive one months’ repayment back as a thank you for being a guarantor.
Who can I ask to be a Guarantor? We find that friends, family or even work colleagues are usually the most approachable. Anyone can stand as guarantor providing they meet the criteria above. It is likely that a person’s decision to stand as your guarantor will be based on their trust in your repayment ability; this is why we recommend choosing someone you know very well. It’s important to discuss the loan application fully with your guarantor, even though talking to someone about your finances isn’t easy especially if you have had problems in the past, however misleading someone into being a guarantor could put your relationship in jeopardy.
What’s the risk? If the borrower is unable to repay the loan, the guarantor will take the responsibility of making repayments for the arrears. Being a responsible lender, we carry out affordability checks on both the guarantor and borrower to satisfy ourselves that the guarantor can afford the repayment amount alongside all their other current financial commitments. Even if we feel that the loan is affordable, we give the Guarantor the final say- the money will be transferred to the guarantor’s bank account and can be returned if they have any doubts. For more information go to Frequently Asked Questions.