What is The Difference Between Being a Guarantor, a Co-Signer, and an Authorised User?

What is The Difference Between Being a Guarantor, a Co-Signer, and an Authorised User?

When someone takes out a loan, in some instances the lender may require as a course of approving the loan that the borrower has a guarantor or a co-signer.

The lender requiring a second person to be on the loan can be for a variety of reasons, the borrower may have weak or bad credit, they may have no credit, or there may be an affordability issue.

In the instance of there being an affordability issue, such as with a mortgage loan, which are large loans which can be difficult for just one person to afford, the lender may require a spouse or partner to also be on the loan.

Having two people on the loan, with two incomes, makes the loan more affordable.

In looking at the differences between a guarantor, a co-signers, and an authorised user, you will note many similarities between guarantors and co-signers. However, there are some slight differences.

In the majority of instances the reason a lender will ask for a guarantor or a co-signer is to reduce their risk on the loan.


A co-signer is someone who usually knows the borrower, and may be living with the borrower. So in some instances the co-signers may be someone who also benefits from the loan.

An example of this may be a couple who are purchasing and financing a car together, or a mortgage to buy a property.

Both parties are equally responsible for the loan, so if one party does not make the payments, the other party the co-signer, is just as liable. And the lender can and will seek out payments from the co-signer.

The equal liability means that the loan can be reported on both parties credit files, which means if one person is supposed to pay the payments and fails to, the arrears and default will be shown on both person’s credit file.


Being a guarantor on a loan is similar to being a co-signer, however in many instances the guarantor is not benefiting from the loan.

A guarantor may be a friend or family member, someone who knows the borrower and feels they will repay the loan.

A guarantor is usually not contacted or involved in the loan, unlike a co-signer, unless the loan goes into arrears or is not paid as agreed. The the lender will expect the guarantor to pay the payments until the borrower begins paying them again.

Being a co-signer or a guarantor can have an impact on your credit files/history, as if the loan does go into arrears or is in default, it can be reported as such on the borrower’s credit history and the co-signer’s or guarantors.

Does this mean you should not co-sign or guarantee a loan for someone, no, but you need to be aware of the repercussions.

Authorised Users

Being an authorised user on an account is a very different term and part of an account than being a co-signer or guarantor.

An authorised user has access to the account, usually a credit card, but it may be an overdraft or some other form of line of credit.

The authorised user has access to the credit and can use the credit, but is not responsible in any way for the payments.

The account holder has allowed this person access to their credit line(s), with out the liability or responsibility of making payments.

This can be a risky thing for the account holder as they are liable for any charges or purchases made by the authorised user.

As you can see, authorised users aside, the differences between being a guarantor and a co-signer are slight and subtle.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.