About being a guarantor


Becoming a guarantor is all about trust. The three main things to consider before entering an agreement are:

  • Do you know the applicant well?
  • Are you confident they can make repayments on time and in full?
  • If they can’t, can you afford to step in?

To check that loan payments can be met we always carry out affordability checks, with both borrowers and guarantors, before we approve a loan. We understand that people may have run into financial difficulties in the past, so we don’t judge applications solely on credit scores. That said, we won’t approve guarantor loans if the applicant has been recently declared bankrupt or is currently in an Individual Voluntary Agreement(IVA) or Debt Management Plan (DMP).

As a guarantor, you will need to be prepared for the worst-case scenario that is having to pay off the entirety of the loan on behalf of the borrower. We will always try to bring loan accounts out of arrears by speaking to the borrower first, but if we can’t, we’ll get in touch with you.

When we’ll need you:

  • If the borrower can’t make their repayment
  • If the borrower enters an IVA, goes bankrupt or passes away

Your home is never at risk, but if we are unable to collect the repayments from either the borrower or the guarantor, the loan will default. This will be reported to the Credit Reference Agencies against the borrower and will have a serious impact on their credit rating. Further legal action may then need to be taken against the borrower, guarantor, or both.

Rest assured, we will always try to find the best solution possible and encourage all of our customers to be as open as possible if they do face any unfortunate difficulties.