Frequently Asked Questions faq

Guarantor Loans Questions and Answers

Questions and answers for the borrower

Who can be a guarantor for me?
Anyone who is a property owner with good credit history who is aged between 25 and 72 can act as a guarantor for you. Basically anyone who knows and trusts you enough that knows you will keep up your repayments. So that can be a family member or friend, a work colleague or even your boss! The only exception to this is that it can’t be your partner or spouse who lives with you.

NEW!!! You can now use a tenant as a guarantor for loans from £1000 to £3000 that are aged between 18 and 65 years

What’s the reason for needing a guarantor to get my loan?
We need to make sure that only people that are able to afford the monthly repayments are lent money. As a credit check is not being performed on you then the fact that someone is willing to guarantee your loan goes a long way. This means we can negotiate the best loan rates available on the market today. As long as you keep up the repayments then your guarantor will have nothing to do apart from sign the documents at the start.

When do I start to pay my loan back?
Usually 1 month after the day the loan completes your repayments will start. The due date of the payment will be the same day every single month until the loan completes, unless you consolidate the loan early. For example if your guarantor loan completes on 18th Feb., then your first payment will be the 18th march and every month thereafter on the 18th until the loan is paid off in full.

Where is the loan amount paid?
For the guarantors safety and security, the full amount is paid into the guarantors bank account. This helps cut down fraud and the guarantor knows exactly how much is being lent to you and the fact they are guaranteeing a loan. It also lets the guarantor know the loan has completed.

Can pay back the loan early?
Yes, There will be details in your loan agreement how the early settlement figure is calculated, this vary between lender. You should however be aware that if you pay back your loan early, in the early days of the loan it is possible you owe more than you originally borrowed.

Will the interest rate change?
No, the interest rate is fixed for the term of the loan, this should help you budget your finances better as you know exactly how much you have to pay every month for the term of the loan with no nasty socks of monthly payment increases.

Will I be charged a fee to get my loan?
You may be charged an administration or broker fee which will cover the costs of setting up the loan, again this varies from lender to lender, this will be clearly explained to you on your agreement before you take out the loan. You will be notified of any fees associated with the loan from the outset.

Can I change my mind about the loan?
If within 14 days of signing the agreement, you change your mind and decide you no longer want the loan then simply contact your loan lender and say you want to cancel the contract, you will have to pay all the money lent to you in full in the 14 days for this to apply. All the details will be on your loan credit agreement.

What happens if I can’t make the repayments?
To ensure additional fees are not added to your account then you must do your up most to keep up the repayments as agreed on in the terms of your loan. However we know that things can change and people can get into financial difficulty, your first port of call should be to contact your loan provider as soon as you know you won’t be able to afford the repayment, they will go out of their way to help you sort something out. If an agreement can not be reached then your guarantor will be contacted, this is due to in the case of a default, it is the guarantors responsibility to make the payment, until a time when you are able to make payments again.

Questions and Answers for the guarantor

Can I be a guarantor?
As long as you are a property owner with good credit history, and you are aged between 25 and 72, then you may act as a guarantor. The only stipulation to this rule is that we can not accept anyone who lives with the application that is a spouse or partner.

NEW! We also accept tenants as guarantors for loans from £1000 to £3000

Why am I being asked to be a guarantor?
We are committed to responsible lending, and we need to ensure that only people who can afford the monthly repayments are being lent money. The fact you are willing to guarantee to repay their loan if they default on their payments goes a long way. This enables us to offer them some of the best rates on the market today.

What do I have to do as a guarantor?
As long as the applicant meets the monthly repayments as agreed, then apart from sign the loan agreement at the start, there is nothing for you to do. Only in the unfortunate event that the applicant defaults on their monthly payments, will you be asked to step in and take over the monthly payments until the applicant can resume the monthly repayments.

What loan amount am I guaranteeing?
It all depends on the amount the applicant has asked for, we only provide £500 – £7500 loans so will be within that amount. All the details of the size of the loan are clearly stated, including any fees, on the indemnity form you will have to sign before the funds are released so you will be fully aware of the exact amount you are guaranteeing. As long as the applicant meets their obligations of paying the monthly payments on time, then the loan balance will reduce over time, until it is paid in full at the end of the term of the loan. At this point your liabilities are discharged.

Should I wish to change my mind about being a guarantor, can I back out of the agreement?
Yes, but only in the early stages, providing the loan hasn’t been paid out. You need to inform the loan company in writing that you have changed your mind. Once the loan has paid out, there is no way of backing out of your obligations as a guarantor. You are only asked to do anything if the applicant fails to meet payments and defaults on their loan.

Who is the loan paid to?
For your protection and security, the full amount of the loan is paid into your bank account (the guarantor) this ensures you know you are guaranteeing a loan, how much the loan is for and when the loan completes.

Can the applicant settle the loan early?
Of course they can. There are details of how the early repayment figure is calculated in the loan agreement. In the early days of the loan it is possible to owe more than was originally borrowed due to interest and fees. The applicant can also change their mind about wanting the loan within 14 days of the agreement being signed, if they wish to do this they must contact their lender and pay back the full amount lent within 14 days of the agreement being signed.

Will I be credit checked as part of the loan process?
Yes. With your consent you will be credit checked, to confirm you are eligible to stand as a guarantor for the applicant. However the credit search will leave a footprint to say that a credit score has been performed, but that is all. The loan will not show on your credit file as a debt, unless in the unfortunate event that you are asked to step in for the applicant due to a default and you fail to comply with your guarantor obligations.

Will the monthly payments change?
No, the interest rate is fixed for the term of the loan so there is no nasty surprises if the BOE decides to raise interest rates.


Representative example: Borrowing £3000 over 36 months with a fixed APR of 48.6%. Monthly Repayment of £144.94. Overall the total to pay back is £5217.84