Who can be a guarantor
A guarantor is someone who can be added to a loan, or similar agreement such as rent, that will make up for any payments missed by the main contract holder. As such, becoming a guarantor can be a big decision, as they are essentially taking on another person’s debt and the issues that come with it. A guarantor loan can help those with bad credit secure a loan that may help them rebuild their credit rating, and it can also be used to consolidate your debt.
With this in mind, it’s important to understand not just who can be a guarantor for a loan, but who should be a guarantor.
While a guarantor can essentially be anyone you know, unless they are financially linked to you, it’s worth considering what your link and relationship is with that person before accepting them as a guarantor. In this guide we’ll run through who can be a guarantor and who can’t, and what you should consider when appointing someone as your guarantor.
Who can be a guarantor
People usually choose a family member to act as their guarantor, but in actuality there’s no real limit on who it can be. Your guarantor can be any of the following:
- A spouse, although there are certain caveats
- A friend
- A relative
- A colleague
While virtually anyone can be a guarantor, there are still certain requirements that must be met. This is to make sure that a lender is confident any repayments will be made.
What requirements are there for a guarantor?
When considering who should be your guarantor it’s worth considering a number of things. The person will need:
- A good to excellent credit rating
- To be aged between 21-75
- To be a resident of UK
- A regular income (i.e. they are either employed full or part time or have a UK pension)
- To hold a UK bank account
- to definitely be able to afford to make the repayments if you, the borrower, misses one
- To have no financial link to the you, the person borrowing (i.e. no joint bank accounts etc)
- To have their own email address
We’d also recommend considering the following before approaching someone about being your guarantor:
- Make a shortlist of at least two, don’t pin all your hopes on one person
- Consider your relationship with this person and how it could be affected
- Consider that even if they can afford to make the repayments, what financial state would it leave them in if you missed several?
While it’s quite common for guarantors to be home owners it’s not essential, in fact, guarantors can be renting, or even living with their family. Similarly, there’s no particular career that a guarantor has to be in, as long as they have a regular income and a good credit rating.
Who can’t be a guarantor
It’s also worth considering what could prevent someone being accepted as a guarantor:
- Aged over 75
- Aged under 21
- Husband, wife, or partner of the applicant
- Poor credit rating
- Has held a CCJ or IVA within the past 6 year
- Holds a financial link with you, the applicant (i.e. a joint bank account, mortgage or similar)
- Has a poor or fair credit rating
- Cannot afford to make the repayments
- Is not a resident of the UK
It’s also worth considering that if the guarantor misses any payments that you have also missed, it’s both your credit histories which will be affected, so make sure you are confident that the person you choose can meet these repayments.
What your guarantor needs to know
Once you have considered who could be your guarantor, when you first approach your friend or family member and ask them to become your guarantor for a loan, it is important that the guarantor also understands what it means being a guarantor. Before a guarantor agrees, it is important that they understand how it all works, that they have certain responsibilities, and that once they co-sign the loan agreement, they cannot stop being a guarantor until the loan is repaid in full back to the lender.
Compare Guarantor Loans
To make sure that you get the best guarantor loan deal possible, we’d recommend comparing guarantor loans. As a leading guarantor loan comparison site we are experts in the suppliers of guarantor loans, and we know what makes a strong guarantor. Compare guarantor loans with us today through our platform. We feature a number of the top guarantor loan lenders on our website to make it as easy as possible for you to find the right guarantor loan for you.