Compare Guarantor Loans
By having a friend or family member guarantee your loan repayments, you could open yourself up to more borrowing options. Use our soft eligibility checker to see what your loan options are without affceting your credit rating.
Why compare personal loans through usave?
Top providers
Compare products from a range of market-leading providers
Same day loans
Get funding the very same day with some of the partners on our panel
Quick eligibility check
Filling the form only takes 60 seconds
Personalised rates
Get a personalised loan rate in under 2 minutes
Compare Guarantor Loans
Want to borrow money but have poor or limited credit history? Struggling to be approved for other types of finance? If you can have a family friend or friend vouch for you, you might be able to take out a guarantor loan.
As with a standard personal loan, you’ll be responsible for making monthly repayments for the full term. But if you fall behind, your guarantor will pick up the slack, making the payments. Your guarantor needs to be fully aware of the financial obligations of signing onto a loan with you. But if they have confidence in your ability to make the payments, a guarantor loan can be a good way for young people and those with bad credit to borrow.
To find the best rates and terms on guarantor loans, compare as many offers as possible. Comparison sites like ours make this process quick and painless.
What are guarantor loans?
Guarantor loans are a type of unsecured loan guaranteed by third party, usually a family member or close friend of the borrower.
The presence of the guarantor gives the lender more confidence that they’ll be repaid. They therefore might approve borrowers they might otherwise reject as too risky, including those with poor or minimal credit histories. Guarantor loans are a practical credit option for young people or those with bad credit. In fact, lenders may require a guarantor if the applicant has a poor credit rating or is borrowing for the first time. And with consistent repayments, these loans can help those people build or repair their credit files.
How to Compare Guarantor Loans
When seeking out a guarantor loan, it’s best to seek offers from a range of providers. But filing separate applications with lenders is not only arduous, it can harm your credit score. Lenders generally run hard checks on applicants, which leave a mark on credit files. Rack up enough credit searches and lenders will grow concerned that you’re looking high and low for credit and be wary of lending you money.
Soft Eligibility Check: Compare Loans Without Affecting Your Credit Score
We offer a way around this, giving you access to personalised loan quotes for you, without the need for payment or time-consuming applications and, crucially without leaving a mark on your credit report. A soft or quotation credit check will be run to find you loan offer, which won’t impact your credit file and score. Our guarantor loan comparison service is completely free and you’re under no obligation to sign up for any loans you’re shown.
To compare guarantor loans, you’ll first need to supply information about yourself and your prospective guarantor, including names, addresses, employment details, and financial information. You’ll then be shown a list of loan offers, with representative APRs and loan amounts, for you to choose from, subject to lender criteria.
How do guarantor loans work?
You can usually borrow between £1,000 and £10,000 with a guarantor loan. Loans are repaid, plus interest, in monthly instalments over the term of the loan, usually one to five years.
Because they allow people who might otherwise not be able to obtain credit to borrow, guarantor loans are sometimes classified as a type of ‘bad credit loan’. That means they come with a higher interest rate than other types of personal loan and can be a more expensive way to borrow. Guarantor loans usually have APRs of between 11% and 50%. But the rate you personally receive will depend on the credit score and personal circumstances of you, the borrower, and your guarantor. However, guarantor loans usually come with fixed interest rates, so the amount you repay each month will remain constant.
Some lenders transfer the funds to the guarantor rather than the borrower. The guarantor will then need to send the funds to the borrower.
Advantages of Guarantor Loans
- They are a way for those with bad credit or for first time borrowers to obtain credit
- Borrowers may be able to borrow a higher sum than they would with other types of bad credit loans
- They can come with lower interest rates than other types of bad credit loans like payday loans
- With consistent repayments, they can help build or repair a credit history
- They are a way for a relative or friend to extend help the borrower without lending them money themselves.
Disadvantages of Guarantor Loans
- They have higher interest rates than some other types of credit, including credit cards and other personal loans. You may end up paying back more than double the original value of the loan.
- The guarantor will be held responsible if the borrower fails to keep up with repayments. This can also include legal action if they themselves default.
- The guarantor can reach an agreement that the borrower has to pay them back for any payments they make, but these agreements are informal and legally unenforceable.
- Relationships and friendships can be complicated or broken by disagreements between the borrower and guarantor.
- There’s some suggestion that providers of guarantor loans are issuing loans that people can’t afford. Be sure you’re borrowing responsibly and within your budget