Published: 03/05/2021

4 things you need to know about guarantor loans


Thinking about taking out a guarantor loan? From the ‘how’ to the ‘who’, Here at 1Plus1 Loans we’re spelling out what you need to know before you make a decision.

If you’re looking at taking out a guarantor loan, there are a 4 things you need to consider before you sign on the dotted line. We’ve delved into the questions you might be asking and explained some things you may need to know.

What is a guarantor loan?

A guarantor loan is like any other type of loan - you’ll borrow a given amount over a set term and repay the sum including interest by monthly repayments. Guarantor loans are an option for someone who may have been turned down for credit previously for whatever reason.

The difference is, you’re not the only person who’ll be held responsible for repaying the loan. If you can’t keep up your repayments, the lender will ask your guarantor to make the payments for you.

How does a guarantor loan work?

In reality, a guarantor loan works just like a normal unsecured loan. The key differences you’ll find will be in the application process and what happens if you can't repay the loan.

When you apply for a guarantor loan, both you and your guarantor will be asked for your personal details, finances and credit history. As a responsible lender, we at 1Plus1 Loans will want to check to see if the loan is affordable both for you, and your guarantor. This is to ensure that if you are unable to make the repayments, your guarantor can afford to meet the repayments for you. We will ask to speak to both you and your guarantor before we accept your application.

If you miss payments, we may also contact your guarantor to ask them to make repayments in line with the agreement. Remember, missed payments can put your account into default and damage your credit score and your guarantor’s if they don’t pay.

Who can be a guarantor?

There are no hard and fast rules about who can be a guarantor. Here at 1Plus1 guarantor loans, the guarantor will need to have a good credit history and be able to afford the loan too.

It’s very important that your guarantor can trust you and you trust them. Covering another person’s loan is a big responsibility, and if you don’t make your monthly repayments on time, it could have a big impact on your personal relationship and your guarantor’s credit history. 

At 1Plus1 we have a number of criteria a guarantor must meet:

  • Have a good credit history.
  • Be a resident in the UK, and a tenant or homeowner.
  • Be aged 18 or over, but no older than 80 when the loan completes.
  • Be able to afford to make payments if the borrower fails to pay.

Why choose a guarantor loan?

Many people who have a “thin” credit file or poor credit history choose a guarantor loan because if you struggle to get accepted for a loan, even though it’s affordable, due to your credit score, having a partner, family member or close friend guarantee the loan may help you obtain credit.


Last updated: 24/05/2021