It’s a loan where someone — a guarantor — agrees to cover you if you can’t make a payment. They’re there for those who find it harder to get personal loans, as having a guarantor gives lenders confidence they’re likely to get their money back.

First, lenders will do a ‘soft search’ on you and your guarantor to decide whether to accept you or not. Don’t worry, this search won’t harm your credit rating. And, you’ll both need to show you have a regular income — just as a way to make lenders confident they’ll get the money back.It’s up to you to make the monthly repayments to pay off the loan. But, to help stop fraud, the loan amount is usually be paid to the guarantor. So, you need to trust your guarantor will send the funds straight over to you. If a payment is late or missed, the lender will tell your guarantor, to keep them in the loop with what’s happening. And, if you can’t make a payment, the lender will go to them to get it. If they can’t make the payment, they may face legal action. It’ll also appear on their credit file and could harm their credit score — not great if you’re close to your guarantor. Missed payments also harm your credit rating and will make it harder to be accepted for the credit you want in the future.

Most importantly, it needs to be someone who can help you pay the loan. It should ideally be someone you trust, like a relative or close friend — but normally a spouse or partner isn’t allowed. They usually have to be under 75 years old, too. It helps as well if your guarantor is a homeowner. It shows they’re a bit more secure, so you’re more likely to be accepted for the loan — and at a lower rate. That’s great, as you’ll pay less interest every month.

We compare a wide range of guarantor loans from across the market, to give you the best choice possible — so you can choose the one that works best for you.