Need help finding a guarantor?
You’re in the right place.
What is a guarantor?
We should probably start by explaining what a guarantor actually is.
Well, a guarantor is someone who trusts you. They’re someone who agrees to back up your loan and make any repayments that you miss.
If you’re struggling to take out a loan from a bank, a guarantor loan means you may still be able to borrow the funds you need without being charged an unreasonable amount of interest.
Unlike banks, we base our lending decisions on friendship and trust. So even if you don’t have the best credit score, if someone’s got your back, we could back you too.
We’re a guarantor lender, which means you need a guarantor for us to lend to you. If you have a guarantor, that’s a good sign to us that someone trusts you and that we should do.
If your credit score isn’t considered strong enough to get a loan from a bank, the alternatives can often be high interest loans with inflexible repayment terms. By asking you to provide a guarantor, we can provide you with the loan you need and at a fraction of the cost of other 'bad credit' loans available.
Who can be a guarantor?
Almost anyone can be a guarantor, whether that’s friends, family, a work colleague or a stranger in a bar. Okay, maybe not a stranger in a bar. Your guarantor needs to be someone that knows you well, and you need to trust each other.
Whoever you’re thinking of, remember that your guarantor needs to meet this criteria:
- aged 23-75
- have a UK address
- be a homeowner or have a good credit score with a history of paying their bills on time
- have a minimum income of £800
- and are able to afford the monthly repayments if you don't pay.
Your guarantor doesn’t need to be a homeowner, but there’s a stronger possibility we’ll be able to accept them if they are. We’d always recommend asking someone you know who owns their own home to be your guarantor first.
Here are the answers to some commonly asked questions about who can be a guarantor:
No, your guarantor doesn’t have to be employed, but they do need to be able to afford the loan payments in case you don’t make them yourself. That can be from any income, provided it’s regular and guaranteed, so this can include pensions.
Yes, we can accept a retired guarantor, though they’ll still need to meet our usual guarantor criteria. That includes being able to afford the loan payments on top of their normal living costs, so they’ll need to be receiving a regular and guaranteed income such as a pension.
Yes, we can accept a family member or partner as your guarantor.
If you have shared finance then we’ll need to be extra sure that having this loan wouldn't put either of you under any financial strain, and that neither of you have any problems paying bills in the past, so we may need to complete some extra checks. If you don’t have shared finance, the normal rules apply and we can accept them as long as they meet our usual guarantor criteria.
Yes, you can live at the same address as your guarantor.
If you have shared finance then we’ll need to be extra sure that having this loan wouldn't put either of you under any financial strain, and that neither of you have any problems paying bills in the past, so we may need to complete some extra checks. If you don’t have shared finance, the normal rules apply and we can accept them as long as they meet our usual guarantor criteria.
It’s important your guarantor understands the terms of the agreement they’re entering into, which means being able to communicate with us over the phone in English.
If they can’t do this without a translator, then we can’t be sure your guarantor will completely understand the responsibility of an Amigo loan, or that we’ll be able to discuss the loan with them once it’s been paid out.
It doesn’t need to be their first language, but we don’t want to pay out a loan without being absolutely confident the guarantor knows exactly what’s going on.
We can only accept guarantors that live in the UK (that’s England, Scotland, Wales or Northern Ireland). As much as we’d love to accept everyone, each country has its own set of rules.
What will you ask my guarantor?
When you’ve completed your five minute application, we’ll need your guarantor to complete their part. They can do this right there with you, or we’ll give you a link to send to them to do in their own time.
Your guarantor will then need to tell us a bit about themselves (name, address, date of birth) and once they’re happy with everything, electronically sign their agreement. We’ll then give you both an instant decision whether they’ve passed the initial guarantor criteria.
After you’ve signed your agreement form, we’ll text and email you a link to give to your guarantor. They can follow this link to fill in their own details and sign the guarantor agreement form online.
If your guarantor doesn’t have the internet, we’ll also send a guarantor application form to you in the post, though we’ll be able to process the application quicker if it’s done online.
It’s important your guarantor fills in their own application (it’s actually considered fraud to fill this in on their behalf). Their application contains all the information they need to know about their responsibilities as a guarantor, such as what happens if they need to make any payments for you. Once you’ve filled in your own application, we’ll give you a link to forward on to your guarantor so they can complete their part.
How do I ask someone to be my guarantor?
“Mum, Dad, Sister, Friend . . . I’m hoping to buy a new car but I don’t have the money right now. Amigo could lend it to me, but I need someone who trusts that I’ll make the monthly repayments to be my guarantor. Are you happy to help?”
Be honest, let them know why you’re hoping to borrow a loan, and explain they could be the one making everything possible. Knowing they could be helping you out in a potentially life-changing way can be an amazing feeling, and the likelihood is they’ll be honoured you asked.
Here’s a couple things that can be good to mention:
- Make it clear that you’ve thought your application through and have worked out it’s the best option for your circumstances. We’re able to help those who may not be able to borrow from banks or other mainstream lenders, and our APR can be up to 25 times lower than payday lenders.
- Let them know a guarantor loan with Amigo could improve your credit score, as long as you maintain your payments on time and keep on top of your other bills.
- Assure them you can comfortably afford the monthly repayments. And when things go wrong, Amigo will always try and come to an arrangement with you first.
Just remember, honesty is the key. You’ll likely be asked why you need a guarantor at all, which could lead to an uncomfortable conversation about credit scores. Don’t worry. As long as you’re prepared and willing to speak openly about your finances, then soon you could be wondering why you were so unsure about asking.
Here's Natalie and Alex with their top tips:
We’ve also written a guide for any guarantors wondering about going ahead. If they have any concerns, chances are we’ve addressed it there. Send the guide their way and when they’re ready, get in touch.
Does my guarantor need to complete a budget plan?
Before the loan can be paid out, we’ll need to make sure your guarantor can comfortably afford any loan repayments they may need to make on your behalf. To do this, we’ll ask your guarantor to complete a quick budget plan.
Lastly, we’ll give your guarantor a call to finalise the application and arrange paying out the loan. Just so you know, the money goes into your guarantor’s bank account for them to transfer on to you.
We need to contact the guarantor directly to make sure they understand and are happy with their responsibilities towards the loan. We’ll also make sure the guarantor can afford the monthly payments as well as having enough money to live their normal life.
The last thing we want is to cause your guarantor any issues further down the line. By contacting them directly before the loan is paid out, we can be confident this isn’t likely to happen.
It’s important your guarantor always knows exactly what’s going on with the loan, so we’ll post a confirmation letter once it’s been paid out. We’ll also send monthly statements after the loan has been paid out so that they know how you’re getting on with the repayments. If the loan fell into arrears, we may also send letters to make sure they’re aware.
Questions?
We've got the answers.
There’s no need to worry if your guarantor has been declined. We’ve already accepted your own application and want to help you get the money you need. You just need to have a think about who else could be your guarantor instead.
There are a few reasons why we’re unable to accept someone as a guarantor, but the most common is if their credit score doesn’t meet our criteria.
If your guarantor was declined on a top up application but they’re currently a guarantor on your existing loan, there’s no need to panic. Your existing loan will continue as normal. This can happen if your guarantor’s circumstances have changed, such as if they’re no longer a homeowner or their credit score has changed. You can still continue with the top-up application; you just need to find a new guarantor first.
A guarantor can only be an Amigo customer on one loan at a time. They may need to step in and make any loan repayments that you don’t, and we don’t think it would be right to expect someone to make payments on two loans at the same time.
You can only be on one loan with Amigo at a time, either as a borrower or guarantor. Your guarantor may be able to apply for a loan elsewhere but keep in mind they may need to pay your loan back if you don’t. They should consider this when reviewing their affordability for any further credit.
If your guarantor doesn’t have the internet, that’s not a problem. Once you’ve completed your side of the application, we’ll send you a paper form that your guarantor can sign by hand. They just need to fill in their details the old fashioned way before posting it back to us.
That being said, it may be worth asking someone with access to the internet to be your guarantor first. There’s much less chance of any delays to the application and it gives them better access to the account once it’s been paid out.
If your loan hasn’t been paid out yet, you can change your guarantor at any time. Email us at [email protected] and we’ll be happy to help.
If you already have a loan with us and want to change your guarantor, you’ll need to repay the loan in full and apply for a new loan, or apply for a top up if you become eligible.
Before we pay out your loan, we’ll complete a budget plan with your guarantor to make sure they can afford the payments, and to make sure they understand they could be responsible for making payments if you don’t. If anything changes and your guarantor isn’t able to afford payments should they need to, we’ll need to discuss what’s happened and work with them to understand their situation. We understand things happen and want to help.
If neither you or the guarantor can make payments, we’ll discuss the potential next steps with you both. If things can’t be resolved, there’s a possibility further action may be taken (but we want to avoid this).
Read our 10 promises on how we deal with loans that fall into arrears.
A guarantor’s responsibility is to make the loan payments if the borrower doesn’t. That’s why we’ll always run through a budget plan before a loan is paid out.
Just to assure you, we don’t actually want to ask the guarantor to step in. If your loan falls behind, we’ll try to work with you directly to find a suitable arrangement to get everything back on track (and inform the guarantor of any arrangements we make with you).
We’ll only ever ask your guarantor to pay in line with their agreement and when it’s in both your best interests. This helps prevent any negative implications of the account remaining behind, such as the arrears increasing and the loan term extending.
Just so you know, if you were to enter into an IVA, go bankrupt, simply stop paying or pass away, then your guarantor would become solely responsible for each monthly payment until the loan is cleared. This is why your guarantor needs to be someone that:
- Trusts you to make all the payments on time every month
- Can afford the monthly payments
- Is comfortable making these payments on your behalf should something unexpected happen.
If someone’s got your back, Amigo can back you too.
No, the loan won’t be secured against your guarantor’s home, and their home will never be in any sort of danger.
If the monthly payments aren’t being met and the account remains in arrears for a long period of time without any arrangement in place, there’s a possibility court action could be taken and a CCJ awarded. We’d never force a customer to sell their home, but if a CCJ isn’t kept to then we could request a Charging Order against any property owned by the borrower or guarantor. This means that if a customer wants to sell or remortgage their home, the amount owed to us will be paid out of the proceeds.
This is only a last resort if the loan isn't paid back, but it’s important we make sure you’re aware. We’d always do what we can to work with you and your guarantor directly to resolve any arrears and avoid this action.
We use your guarantor’s debit card as a form of ID check. This makes sure we’re speaking with the correct person and protects your guarantor against fraud.
After the loan is paid out, we may also need to collect payments from your guarantor if you don’t make the monthly repayments yourself. Don’t worry, we’ll always try to resolve any arrears with you first. Only if this isn’t possible or we don’t hear from you will we need to take a payment from your guarantor. If this does happen, we’ll use your guarantor’s debit card before the account can fall further behind. This stops any arrears from building or becoming unmanageable, so it’s important your guarantor keeps their card details up to date.
Anything we haven't covered?
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