Posted in: Guarantor Loans

Who to use for a Guarantor for Guarantor Loans?

If you are interested in getting a guarantor loan then you will need to think about who to use as a guarantor. This can be a big decision and you will need to think about whether the person you choose will be suitable. It is good to think about what is needed in a guarantor and then who you know and whether it will work.

What is Needed?

A guarantor will need to have a good credit record as there will be a credit check done on them. They will have to give their bank details because they will have to cover the repayments for the loan if you cannot pay them. This means that you need to choose someone that you know will have a good enough credit record. They will also have enough money so that they can cover those repayments if you cannot and this means that they will need to be able to manage that. It could be that they will make every repayment (although I am sure you will hope that this will not be the case) and so they will need to have enough for this. Of course, they will also need to agree to help you out like this.

Who do you Know?
So, you will need to think about all of the people that you know and whether they fit these criteria. Of course, you will not necessarily know what the credit record is like for all of the people you know. However, if you can come up with a list of people that feel should have enough money and that will be willing to help, then you have somewhere to start. You will have to talk to them about it of course. So, then you will be able to ask them about their credit record and if they will be able to help.

Will it Work?

It is not as simple as just picking them and asking though. Before you speak to them you need to think about how it might impact your relationship with them. For example, how will they feel about the fact that you are even asking for help? How will they react if they have to make payments for you? Will they expect you to repay them and if you cannot afford to what will the consequences be? It is good to think about these things and then if you do decide to ask them, discuss it with them. It is really important to decide, before taking out the loan, what is going to happen with regards to repayments if they make one. Will they expect you to pay them back at all? If so when? It is good to have something in writing to because if their situation changes and they suddenly need money, then they might expect you to help them out and repay what they paid on your behalf. If you cannot afford to do this then you could find that you will fall out with them and this could ruin your relationship. You need to think about whether it is worth taking this risk just to get a loan. There may be other people that you could choose which you are less likely to fall out with so take time to think about their personalities too. It can also be worth thinking about your relationships with others. For example, if you have a sibling and use your parent as a guarantor and they make some repayments for you, that sibling could get jealous and you could fall out with them. This could happen with other family members or friends too and so you need to consider whether it is worth it.

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