Guarantor Loans

“A guarantor loan is a type of unsecured loan whereby the guarantor must pay the loan back if the borrower becomes unable to do so.”

Guarantor Loans
from £1,000 – £35,000

Terms from 12 – 60 Months
From £1,000 – £35,000
Responsible Lenders
Loanable Limited is a credit broker & not a lender

Guarantor Loans
from £1,000 – £35,000

Terms from 12 – 60 Months
From £1,000 – £35,000
Responsible Lenders
Loanable Limited is a credit broker & not a lender

What is a Guarantor Loan?

A guarantor loan is a type of unsecured loan whereby the guarantor must pay the loan back if the borrower becomes unable to do so.

A guarantor can, in theory, be anyone willing to take on the responsibility, providing they can satisfy the lender that the loan would be affordable to them should they have to start making the repayments. In addition to this, the guarantor needs to be a UK resident who in almost all cases is between the ages of 18-75 and who may, depending on the amount borrowed, also need to own a UK property.

Typically, the borrower will look to family members or friends to act as their guarantor. The funds made available to them can then be used for more or less any legal, non-commercial purpose such as putting the money towards the deposit on a property or paying for a vehicle or a wedding.

A guarantor loan is suitable for (and popular amongst) people with bad credit, little credit or no credit who may have been declined loans elsewhere – particularly from more traditional “high street” lenders from whom it has become increasingly difficult to secure a loan since the global financial crisis of 2008.

It is important that any potential guarantor fully understands their potential liability since they will have to take on the full, outstanding amount of debt should the borrower default.

* Remember failure to meet repayments on a guarantor loan can have serious consequences for you and the guarantor. Always borrow responsibly. *

FAQs about Guarantor Loans

What is a guarantor loan?

A guarantor loan is an unsecured personal loan whereby in the event that the borrower is unable to meet the repayments and defaults, the debt must be met by the third party who agreed to act as the guarantor.

What do I need to be eligible to apply?

You will need to be at least 18 years of age, have UK residency, a source of income (most typically employment), a UK bank account with an associated debit card, and most probably you will need to have a mobile telephone as well.

How much can I borrow?

You can typically borrow from between £500 to £10,000 for a period of between 1 and 5 years.

What are the criteria for an eligible guarantor?

A prospective guarantor must be a UK resident between the age of 18-75, have a good credit rating and be adjudged to be able to meet the repayments of the loan should the borrower default. The guarantor may also be required to be a homeowner as well (this is not necessarily the case, but becomes more likely as the loan amount gets higher).

What factors should I consider before taking a guarantor loan?

The main consideration should be feeling confident in making the loan re-payments so that you don’t have to pass the debt on to the guarantor. A guarantor loan is an opportunity for someone with bad credit to secure funds, but it should only be through unforeseen circumstances, and not reckless conduct, that the debt is passed on to the guarantor.

I’m self-employed. Can I still apply for a guarantor Loan?

Yes, you can. As mentioned elsewhere, a critical criteria will be securing a guarantor who is deemed to have the financial health to guarantee the amount you are borrowing.

Can a Guarantor Loan help me improve my Credit Rating?

Yes, provided you meet your re-payments in a timely fashion then this may help you improve your credit rating.

How quickly could I receive my money?

This will depend on the individual lender and how quickly you and your guarantor complete the necessary paperwork, but if you do so promptly you could have your money within 24 hours – although it may take several days.

If a condition of my loan is that the guarantor is a homeowner, can I still apply if their property is in Scotland or Ireland?

Yes, we have lenders who will consider such applications. However, this may result in the application process taking longer.

Can I apply for a guarantor loan over a Bank Holiday?

Yes, although you can expect the application process to be slowed down.

Can I get the loan without a Guarantor?

No, it is not possible to secure this loan product without a guarantor. There are other types of loans available on the website that you may wish to look in to, however.

I have very bad credit. Can I still apply?

Yes, you can, and a guarantor loan may be the ideal type of loan for you given the weight that is given to the guarantor’s credit rating over and above your own. However, you should still be confident in your own mind that you can be relied upon to meet the loan repayments so you won’t have to pass on the burden of your debt to the guarantor.

Can I change the date of my loan repayments?

Lenders on our panel will typically allow this. However, you can expect to have to provide the lender with several days notice in advance of the next due payment.

What happens if I miss a payment?

If ever you feel like you won’t be able to make a payment, you should contact the lender at the first opportunity to let them know. It is likely they will work with you towards finding a solution. If you miss a payment without telling them, you can incur extra fees and charges. We also strongly advise that if you can’t make a payment, you never go “off the radar” as charges can accrue and the lender can approach your guarantor if you default to enforce payments the guarantor will be contractually obliged to make.

What questions can my guarantor expect to be asked and what information will they need to provide?

This may vary somewhat depending on the lender. However, the guarantor can expect to have to prepare a budget showing incomings and outgoings so they can demonstrate that the loan is affordable to them should you default. More specifically, the guarantor’s income from their salary or pension or other earnings will be looked at; as will their monthly bills, mortgage repayments and other expenses of note. The guarantor may also be contacted by the lender by phone to clarify certain details.

Will I be charged a fee for settling my loan in full early?

We have an extensive number of lenders who will not charge you any fees or penalties for the early settlement of your loan.

What is APR?

APR stands for Annual Percentage Rate. This basically tells you the cost of a loan over the course of a full year. The APR amount is added to the capital amount of the loan and is a valuable tool in choosing between different loans as it helps you compare the annual cost of a loan.

What is the difference between a lender and a broker?

A lender offers funds directly whereas a broker matches you with a panel of different prospective lenders. Applications through a broker have the potential to save you time and offer you a broader spectrum of possible loans.

My guarantor was declined from being allowed to secure my loan. Please can you explain why?

Since loanable are a broker and we don’t pay out the actual loan ourselves, it is difficult to know exactly why a lender declined your application. However, normally this will be because the prospective guarantor’s credit score wasn’t high enough to satisfy the lender that they could repay the loan if you defaulted. Other factors for an unsuccessful application include the guarantor not being a homeowner – often when loan amounts of £3,000 or more are involved. In addition, the guarantor may be declined if they are already guaranteeing someone else’s loan, or indeed if they have an active loan(s) themselves.

Can I top up the amount I have borrowed?

There are lenders who provide this service although, amongst other things, this will depend on the re-payment history of the loan thus far and the affordability of the additional borrowings to you and the guarantor who would have to meet this new amount should you default.

Can I take a break or “holiday” from making repayments?

The lenders we match you with are unlikely to offer this service and if you think it’s something you may require, we would advise that you carefully consider the affordability of a loan to you.

How do I actually re-pay my guarantor loan?

Most lenders will require you to set up a direct debit from your bank account and they will want the details of a debit card associated with that account. Thereafter, a pre-agreed amount will automatically be debited from your account on a pre-agreed date of each month providing there are sufficient funds.

I have an existing guarantor loan and have come in to some extra money. Can I make an extra payment to reduce my balance?

There are a number of lenders on our panel who will allow you to do this without applying any extra charges or fees.

What happens if neither me nor my guarantor can re-pay the loan instalments?

This can be a very serious situation for both you and the guarantor. It will adversely affect both your credit files and your ability to obtain future credit. More seriously, it can lead to CCJ’S and further action being taken against the guarantor. This is why it’s extremely important that the debt is affordable to the guarantor should the worst case scenario ensue.

Can I cancel my direct debit arrangement with the lender?

Yes, you can. But you should only do this if you give the lender due notice and if you are doing so for the purpose of moving the loan re-payments over to a different bank account. Simply stopping a direct debit won’t make the outstanding loan go away and can lead to extra charges, fees and additional action beyond that being taken against you.

If I’m late with a payment, can I stop my guarantor finding out?

The procedure varies between different lenders, but there may be little or nothing you can do to prevent the guarantor finding out. They may, in fact, be informed in writing of a default the very day after the default takes place. In the event you are late with a payment, we advise that it’s better to be transparent with your guarantor.

Will the lender charge me a fee for the creation of the loan?

Some lenders apply fees for the paper work involved in creating a loan. However, there are lenders on our panel who do not apply such fees.

What is a “cooling off period”?

This is a service offered by some lenders, enabling customers who have received a loan and who have subsequently changed their mind to return the loan in full – usually within 14 days. The amount to be returned will be the total loan amount and any interest incurred between the date the money is received and the date upon which it is returned.

I am currently bankrupt but have a potential guarantor. Can I still apply?

Unfortunately, people who are currently bankrupt cannot apply.

I previously had a guarantor loan which I paid back in a timely fashion without needing any help from my guarantor. Can I apply for another one?

Yes, you can, providing of course you have an eligible guarantor. It’s also possible – subject to your financial situation as a whole – that your credit rating has now improved and other loan products may be available to you which you can learn more about at

I already have one guarantor loan. Can I apply for another with a separate guarantor?

In theory, yes, although it’s important not to abuse the trust of guarantors and to only take on a level of debt that you are confident of servicing so as to protect your own interests and the interests of your guarantor(s).

I’ve been told my loan will be paid in to my guarantor’s account and not mine. Why is this?

This is common anti-fraud practice and is nothing to be concerned about. Once the funds have cleared in to your guarantor’s account, they can arrange an electronic transfer, bank transfer or pay the money over to you by cheque.

My guarantor is a homeowner with a lot of equity in their property. Does this mean I’m guaranteed to receive a loan?

While this will considerably bolster your chances, the guarantor will still need to show they can afford the loan re-payments in the event you default.

Can a guarantor loan application have an adverse affect on their credit profile?

While a credit check will be run on a guarantor by the lender, it is of a type known as a “soft search” and it does not have an adverse on the guarantor’s credit file. The only way a guarantor loan can have an adverse effect on the guarantor’s credit file is if they default on a loan you have in turn already defaulted on.

Will lenders check my credit rating?

Lenders will check your credit rating only insofar as to establish you are not presently bankrupt. It’s worth remembering as a general point that guarantor loans are highly suited to people with bad, little or no credit.

My guarantor has been asked to prove they are a homeowner. What documentation will they need?

The overall requirements can vary slightly from lender to lender. However, a recent mortgage statement, the land registry document and the deeds to the property showing the property is registered in the guarantor’s name are all documents they may need to be produce.

Can I use the loan to pay off other debts?

Yes, you can, although you may want to consider other loan products and seek independent financial advice before doing this as a guarantor loan may not be the most cost-effective way to consolidate debt.

What is variable interest?

This means the interest added to the monthly loan repayment can fluctuate: it may go down and it may go up. Variable interest is a form of interest that has rarely been used for a number of years in the loan market.

What is fixed rate interest?

This means that the interest applied is fixed at the outset – and so as far as loans are concerned, the same amount of interest will be applied to each and every loan repayment.

Can an employer act as my guarantor?

Yes, they can – as can friends, family members, neighbours and many other types of people. The main criteria is that a guarantor is aged between 18-75, has a good credit profile, has UK residency and of course is willing to underwrite the amount being borrowed.

Please can you explain what an electronic signature is?

This is a process by which you agree to the terms and conditions of a loan agreement by typing your name in to a box at the end of a loan application, thereby denoting that you are in agreement with the contents of the agreement.

Can I make a guarantor loan application if the guarantor and I have a joint bank account?

Yes, but while you are still able to make an application, the lender may well need to be satisfied that the guarantor could meet the loan re-payments with incomings and assets that they control independently of you and your joint account.

What happens if I agree to be someone’s guarantor but then want to opt out down the line?

You would either have to re-pay the loan and interest in full or the borrower would have to do the same. Since being a guarantor is a legally binding undertaking to honour a potential outstanding loan amount arising by way of default, it cannot simply be backed out of which is why it’s crucial to be fully aware of the responsibility of a guarantor loan before agreeing to it.

My prospective guarantor is British but lives in Europe. Can I still apply?

As well as fulfilling other criteria, the guarantor needs to live in Britain so in this instance you would not be able to apply.

I’m a student. Can I still apply for a guarantor loan?

Providing you are at least 18 years of age and can find a guarantor, then you are still eligible. You will need to demonstrate the loan is affordable to you which will require proof of income such as from a part-time job.

Can my guarantor be retired?

Providing the lender considers the loan to be affordable to them in the event the borrower defaults, then the answer is yes.

Can my spouse act as my guarantor?

In theory, yes, as long as in addition to meeting other criteria, they can demonstrate incomings they receive completely independently of you that are adjudged to be sufficient to cover the loan in the event that you default.

My prospective guarantor is concerned that if they act as guarantor for me, they will be unable to take a loan out for them self down the line. Are they right to be concerned?

There are some loan providers who will not lend to existing guarantors while there are others who will. The prospective guarantor should ask them self if they are comfortable with the financial responsibility that could ensue from being both a borrower and a guarantor.

Loanable have matched me with a guarantor lender who require a budget plan. Please can you explain more?

A budget plan requires you to set out your incomings and outgoings and is a tool designed to establish the affordability of a loan to you.

What do I need to be eligible for a top up loan?

The criteria varies amongst the loan providers who offer such a service, but they will look towards factors such as how prompt you have been in making payments, how many payments you have completed before you apply and how much of the principal loan amount you have already paid off.

Can I top up my guarantor loan without informing my guarantor?

No, your guarantor will need to be informed since the lender will need to assess whether or not the guarantor can afford to re-pay the increased loan amount in the event that you default.

Can I apply for a guarantor loan as someone one who is unemployed?

Some lenders will not allow you to while others will. In the case of the latter, you will need to demonstrate to the lender’s satisfaction that you can meet the loan repayments and that you can also provide a suitable guarantor.

How can I check my loan account balance?

You will be able to check your balance with your loan provider by logging into your account online and/or by contacting one of their sales representatives.

What happens if my guarantor’s bank details or address change?

In this instance, it’s important they contact the lender at the first opportunity to inform them.

I am a UK Citizen who lives outside the UK. Can I still apply?

Unfortunately, no, you need to be living in the UK to apply for a guarantor loan.

I was recently discharged from bankruptcy, can I still apply?

Yes, there are lenders on our panel who will lend to customers discharged from bankruptcy subject to you satisfying other criteria.

As a borrower, is my home at risk if I default on the loan?

No, the loan is unsecured, so your assets are not at risk. As explained elsewhere, if you default it becomes the responsibility of the guarantor to re-pay the loan.

Who regulates Loanable?

Loanable is regulated by the Financial Conduct Authority (FCA) For more information, see