Guarantor Loans UK: Complete Guide to Getting Approved (2025)
Everything you need to know about guarantor loans in the UK. Learn how they work, compare rates, understand the risks, and discover whether a guarantor loan is right for you.
Guarantor loans let you borrow with someone else vouching for repayment. Understand the risks for both parties.
| Factor | Borrower | Guarantor |
|---|---|---|
| Credit check | Yes | Yes |
| Liability | Primary | If borrower defaults |
| Credit impact | Builds credit | May affect borrowing capacity |
Serious Commitment
Frequently Asked Questions
Can I get a guarantor loan with a CCJ or default?
Yes, guarantor loans are specifically designed for people with poor credit, including those with CCJs, defaults, or even past bankruptcies. The guarantor's good credit compensates for your poor credit history. However, very recent CCJs (within 6 months) or multiple active defaults may still result in rejection.
Does my guarantor need to be a homeowner?
Most lenders prefer homeowner guarantors as they're seen as more financially stable. However, some lenders (like Buddy Loans) accept tenant guarantors if they have excellent credit and stable income. Homeowner guarantors typically get better rates and higher loan amounts.
Will a guarantor loan improve my credit score?
Yes, if you make all payments on time. The loan appears on your credit file as a successfully managed credit account, which builds positive payment history. After 12-24 months of on-time payments, your credit score should improve significantly, potentially qualifying you for better loan products.
Can my guarantor withdraw from the agreement?
Once the loan agreement is signed and funds are released, your guarantor cannot withdraw. They remain legally liable for the full loan term. However, during the 14-day cooling-off period after signing, either party can cancel the agreement without penalty.
What's the maximum I can borrow with a guarantor loan?
Most guarantor lenders offer £1,000 to £15,000, though some go up to £20,000. The amount you can borrow depends on your income, affordability, and your guarantor's financial situation. Lenders typically won't lend more than 30-40% of your annual income.