When applying for a loan, you may be asked to provide a guarantor. A guarantor is someone who agrees to repay the loan if you default. This means that they must be someone who is financially stable and has a good credit history.
Who Can Be a Guarantor?
Generally, a guarantor must be:
- Over 18 years old
- A UK resident
- Not bankrupt or have any County Court Judgements (CCJs)
- Able to afford the repayments if you default
What Are the Requirements for a Guarantor?
In addition to the general requirements, lenders will typically have specific requirements for guarantors. These may include:
- A minimum income level
- A good credit score
- Homeownership
How to Find a Guarantor
If you need a guarantor for a loan, there are a few ways to find one. You could ask a family member, friend, or colleague. Alternatively, you could use a guarantor service.
Guarantor Services
Guarantor services connect borrowers with potential guarantors. These services typically charge a fee, but they can be a good option if you don’t know anyone who can act as your guarantor.
Tips for Finding a Guarantor
When looking for a guarantor, it’s important to be upfront about the risks involved. Make sure they understand that they will be liable for the loan if you default. It’s also important to choose someone who you trust and who is financially stable.
Conclusion
If you’re struggling to get a loan, a guarantor can be a helpful option. However, it’s important to remember that a guarantor is taking on a significant financial risk. Therefore, it’s important to only ask someone to be your guarantor if you’re confident that you can repay the loan.
