Our frequently asked questions aim to answer everything you need to know about guarantor loans. We consider some of the most popular questions such as how to apply, who could be your guarantor and how repayments work. For any additional questions, you are welcome to email us at any time and we will answer as soon as possible. We also recommend reading our glossary of terms for more information. For our US partners, see Harpsey.  
  • How does a guarantor loan work?

    Applying for a standard loan usually involves the borrower and the lender. But with a guarantor loan, the borrower invites someone they know to be a ‘guarantor’ who will ‘guarantee’ to cover the repayment of the loan if the customer is unable to repay. The idea is that the lender has greater security knowing that there is another person that they can take repayment from, which is why this type of loan can help those with bad credit.  Ideally if you can find a guarantor with a good credit history, this will increase your chance of being approved.

  • What is the most I can borrow with a guarantor loan?

    You can borrow from £500 up to £15,000 with a guarantor loan – however the amount you can borrow will depend largely on your affordability (your income and how much you can afford to repay), the length of the loan term, the quality of your guarantor and whether you are a repeat customer.

  • How do I apply?

    Using either our loan selector, or one of the lender specific buttons, simply complete the application online and our dedicated team will call you and your guarantor to verify the details.

  • What is the criteria for applying?

    To apply for a guarantor loan, you must be over 18 years of age (maximum 75 years of age) and working and living in the UK for at least 3 years. You must have a working email address in order to verify your activation email and have a working debit account to receive the funds and make your repayments in the future. You must have a guarantor as part of the application who will commit to repaying your loan if you are unable to do so.

  • Who is a typical guarantor?

    A typical guarantor is a friend, colleague, family member or spouse. You need someone who you can speak openly to about your finances and who is able to manage the repayments if you cannot afford them.

    The guarantor is someone who understands that you have bad credit and wish to show that you can afford to repay a loan and improve your credit rating.

    The best types of guarantors are those that are homeowner or car owners who have demonstrated a good credit history. The lender believes that if the guarantor has good credit and has agreed to cover the borrower’s repayment, they should be able to recover the money they lend. It is all based on trust: if the guarantor trusts you, the lender can too! But someone with a home or a car is less likely to leave the country if they are have assets in the UK. They are likely to be easily contactable if the borrower misses repayment.

  • Is a guarantor loan unsecured?

    Yes, a guarantor loan is completely unsecured, you will not be required to put down anything as a collateral. You simply require someone to be your guarantor to be eligible and they are your kind of security.

  • What if I have bad credit?

    You will still be eligible for a guarantor loan even if you have bad credit. Guarantor loans certainly appeal to people who have been turned down by other banks and lenders. So despite poor credit history, by having a guarantor with good credit to cover your repayment, it reduces the risk significantly for the lender.

  • Can a guarantor loan help my credit rating?

    Yes, if you repay your loan on time, the positive feedback will be sent from the lender to the main credit reference agencies and the guarantor loan will improve your credit score. This is why a guarantor loan helps those with bad credit to demonstrate their creditworthiness and get their finances back on track.

    However, if you fail to repay your loan on time, the information will still be sent back to the credit reference agencies. It will say on your file that you defaulted on a loan and this will cause your credit score to worsen.

  • How does the repayment work?

    Each lender varies in their approach to setting up your monthly payments and how they will contact you. Before your loan completes the lender will confirm everything in writing and you will have the opportunity to ask them any specific questions.

    You will be required to repay your loan in monthly instalments over 1 to 5 years. Repayments will be taken out of your account automatically via your debit account. Lenders rarely allow you to repay with a credit card, cheque or cash. You may repay early at any point with some lenders charging an early repayment fee and some lenders who do not.

    You will be sent reminders via email and SMS on the days leading up to each collection so you can get the repayment ready to collect from your debit account.

  • What happens if you can’t repay?

    If you cannot repay the guarantor loan, the lender will typically contact you on the phone and via email to discuss repayment. If you cannot repay the full amount due that month, you can discuss creating an arrangement or pay plan with the company to make smaller payments each month. If you fail to respond to the lender’s communications, there will be added fees and charges to your account and the money will be taken automatically from the guarantor’s debit account.