Compare Cheap Guarantor Loans

If you've got bad credit, you could get a loan by designating a guarantor. Hit the button to see what you could borrow.

Borrowing Made Simple

We pride ourselves in cutting out the hassle and time wasting that may come with going to the bank for a loan and instead offer an alternative system where you can access the money you need with the helping hand of your guarantor. Our process is outlined below in 3 simple steps:
Step One – Apply Online Once you have decided how much you want to borrow and your repayment period and completed our form then your details will be passed to our partner company Freedom Finance, whose own application form will be populated with the details that you have given us.
Step Two – Confirm your Details You will be presented with an online agreement which you will need to read and sign and a link for your Guarantor to follow where they will complete their part of the application form and again provide their signature.
Step Three – Upload Supporting Documentation Both you and your Guarantor will need to upload any supporting document that we have asked for such as identification, income details, address, and employment status etc...

What is a Guarantor Loan?

If you are in need of credit, but you either have an adverse credit history or have no history of borrowing money, a guarantor loan might be a suitable option. They are unsecured loans where a guarantor who commits to repaying the loan if the primary borrower fails to do so. This provides an additional layer of security for the lender, who is taking the risk of lending to someone with an adverse credit history.

How Do Guarantor Loans Work?

In order to take out a guarantor loan you must first find a guarantor – typically a friend or family member – who is willing to make your payments if, for any reason, you fail to be able to do so. The guarantor will typically be called on to pay 48 hours after the initial missed payment.

Because of this backing, your credit history (as the borrower) will not be important when you apply for the loan, although the provider will still assess your ability to make payments. The main focus will, instead, be on the financial stability of the guarantor.

Guarantor loans typically come with high interest rates and because of this and the responsibility that will be placed on them, it is important to have a good, trusting relationship between yourself and the guarantor. The guarantor can be anyone so long as you do not share financial responsibilities with them already – for example, if you have a shared bank account or joint mortgage with your partner, you may not use them as a guarantor.

More about Guarantor Loans

Who can be a guarantor?
As guarantor loans are unsecured, you do not need to be a homeowner to qualify for a guarantor loan. However, the criteria for your guarantor is more stringent. In most cases, a guarantor needs to be a UK homeowner who is over the age of 21. In addition to being a homeowner, the guarantor should have enough equity in their property to cover the cost of the loan. The guarantor can be anyone the borrower knows (family, friends, etc). The guarantor will need to provide the same information as the borrower, such as their credit history, employment records and bank statements. The decision regarding whether the application is accepted or not will be based on the employment status and credit history of both the borrower and the guarantor. Although most lenders require the guarantor to be a homeowner, there are some which do not, however, this is rare.
The Role of the Guarantor
Being a guarantor in itself does not have a negative impact on the guarantor's credit rating and if the borrower successfully keeps up with all of the payments, there is no need for the guarantor to be involved. The guarantor only becomes involved in the worst case scenario, i.e. if the borrower misses payments or defaults on the loan. If the borrower misses one payment, it is possible for the guarantor to cover this and then for the borrower to resume the repayments. However, if the borrower defaults on the entire loan, the guarantor becomes liable for it. As the guarantor is legally responsible for the money, they will encounter serious financial difficulties if they cannot cover the loan, which will have a negative impact on their credit rating and will lead to the straining of personal relationships.
Are guarantor loans expensive?
Although rates vary from case to case, and depend on numerous factors such as your credit history and employment status, the APR for guarantor loans is generally around 50%. This may seem high, but it is a much cheaper option than payday loans and other bad credit loans. In addition, guarantor loans enable you to borrow more money, for longer periods of time, than many alternatives. Guarantor loans enable you to borrow anywhere between £1,000 and £7,500, for a period of between 1-5 years. As the rates for guarantor loans are better than other loans aimed for people with poor credit ratings, they are a viable solution. In addition, they are also an opportunity to rebuild your credit score by keeping up with the payments, which will make it easier for you to obtain credit in the future. However, it is important to be wary of the fact that some lenders charge hefty 'up-front' and arrangement fees. When taking out a guarantor loan, be sure to look for these hidden fees, as they are increasingly common and can potentially be extremely expensive.
ME Expert Ltd is not authorised to provide advice and are introducing you to a regulated firm with whom we are not under a contractual obligation to conduct mortgage or general insurance mediation business with exclusively. You should ensure you provide any potential insurer with your full details and ensure that you are eligible to make a claim(s) in relation to the cover offered. ME Expert Ltd will receive a small payment for certain general insurance introductions which will not normally exceed £35. MoneyExpert does not give advice on or recommend any particular insurance product or service or whether it is suitable for your personal circumstances. The information provided is to help you to make your own choice about how to proceed