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What are Guarantor Loans?

A guarantor loan is a loan whereby a second person is responsible for paying off the loan debt, if the applicant who initially borrowed the money, misses any repayments.

In short ‘the guarantor guarantees the loan’.

This type of loan is another option for those with a bad credit history, who may have trouble securing a conventional loan.

Guarantor loan eligibility


To apply for a guarantor loan you will need to be over 18 years old, have a UK bank account and be able to show that you can afford to make the repayments.


To act as the guarantor, you will need to be over 21 years old, have a UK bank account and be a UK home owner, this is sometimes a requirement, as the loan may be secured against the guarantors property.

Although the guarantor can be a family member or friend, they cannot be financially tied to the person requiring the loan (for example husband/wife).

Loan term

Guarantor loans are usually for a term between 1 and 5 years.

Interest rates

Guarantor loans have no cap on the interest rate, it is therefore important that you look at the representative APR and the final total before you agree to the loan.

As a small niche product it is equally important that you compare different lenders, as the interest rate and fees on guarantor loans can vary greatly.

Missed loan repayments

If you fail to make a repayment, the responsibility for paying off the loan then falls on the guarantor, possibly putting their home at risk of repossession and affecting their credit rating.


Just like any other loan, always check the contract for any early redemption fees, overpayment fees, admin fees or any other fees that this type of product may be subject to.

Guarantor loans alternative

If you have a car or other vehicle then our online logbook loans may be a suitable alternative to guarantor loans, without putting a family member or friend at risk.

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