What the guarantor actually agrees to
If you miss a monthly payment, the lender contacts the guarantor and requires them to pay. Missed payments on the account appear on both credit files. If the account defaults, the guarantor becomes fully liable for the outstanding balance.
Who qualifies as a guarantor
UK homeowner (usually preferred), aged 21-70, with a stable income and clean credit file. Parents, older siblings and grandparents are the common choices. Partners can guarantee but co-borrowers are usually simpler in that case.
What it unlocks for the main borrower
APRs typically 3-8 percentage points lower than a no-guarantor bad-credit deal on the same customer. Higher loan amounts. Access to lenders who wouldn't otherwise consider you.
The conversation to have with your guarantor
Explain exactly what happens if you miss a payment. Agree what you'd do — do you cover the guarantor's out-of-pocket cost the next month? Get this in writing between you (an email counts). Money issues sink family relationships more often than the finance itself does.
