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Original poster

Been asked to be a guarantor!

25 replies

Creole · 16/08/2014 11:10

Need some advice on this please before I commit myself. This is for a personal loan of £6k. Thanks in advance

OP posts:
NotALondoner · 16/08/2014 11:15

Don't do it.

That's the only advice you need.

lucidlady · 16/08/2014 11:18

Who's asked you and what are their circumstances? I think generally advice is not to do it.

rubyflipper · 16/08/2014 11:22

Run away!

There was a thread recently about being a guarantor. The overwhelming majority said DON'T DO IT.

There is a reason why you have been asked - and that is because the person cannot get credit anywhere else. If they default on the loan - you will have to pay it off.

Bunbaker · 16/08/2014 11:23

Say no. You will be liable if they default on their payments.

Lucked · 16/08/2014 11:27

We'll some people can't get credit because they have no credit history rather than a bad credit history. However there is always going to be an element of risk.

GilbertBlytheWouldGetIt · 16/08/2014 11:30

I'd only do this for one of my children.

PacificDogwood · 16/08/2014 11:31

Same here: I'd only do it for one of my children, and even then only if I was in a position to pay the loan if they defaulted.

GemmaTeller · 16/08/2014 11:32

No, no matter how much the person promises they will pay the loan back/ can afford it etc,.

If they default you'll get saddled with it.

KillmeNow · 16/08/2014 11:37

Do it by all means . As long as you love the person enough to GIVE them £6000 .

If not then politely decline. There are many other ways to obtain credit and if this person cannot access any of them you have to ask yourself why.

PigletJohn · 16/08/2014 12:09

You are being asked to be a guarantor because no lender trusts them to pay back the loan, for reason that they know, and you don't.

In a default you will have to pay the £6k, plus accrued interest at probably an extortionate rate, plus default charges. £10k might cover it.

Only agree to be a guarantor if you are willing to give these people £10k and never see it again. In which case make it a gift and save yourself a lot of worry.

gamerchick · 16/08/2014 12:11

Can you afford to pay it off if they don't? And would you mind?

If the answers no then you have your answer.

gamerchick · 16/08/2014 12:14

Or yes even.

Plus don't you have to be home owners now to guarantee loans?

AlpacaMyBags · 16/08/2014 12:23

This reply has been deleted

Message withdrawn at poster's request.

ellenjames · 16/08/2014 12:28

No way!! Unless it was one of my children and even then only if I could afford it and knew what it was for! You would have to be mad to consider it!!

IDontDoIroning · 16/08/2014 12:28

Do you have £6k spare (more actually if you include any interest so maybe £8 to £10k) that you could afford to give them?
If you do then say yes hope they don't default and everything is great.
If you don't then don't say yes because if they default YOU will be paying that loan back for them.

PacificDogwood · 16/08/2014 12:34

Good point about interest adding to the sum being guaranteed.

SavoyCabbage · 16/08/2014 12:35

I too would only do this for my children.

caroldecker · 16/08/2014 12:53

Interest rate is probably extortionate. If you love them enough to guarantee a loan, then borrow the 6k yourself at a reasonable rate and lent it to them yourself. If you are not prepared to do this then do not guarantee it.

NotCitrus · 16/08/2014 13:24

If it was for rent, then I've done it a few times for friends as hardly anyone can rent in London without, and landlords have a duty to mitigate their loss so it wouldn't be that much in the worst case scenario.

For a loan? Just no. If it's your best mate needing money to say escape an abusive relationship, borrow it yourself and lend to them, but no way would I guarantee a mystery loan.

WeAreEternal · 16/08/2014 14:10

Only do i

WeAreEternal · 16/08/2014 14:12

Let's try that again...

Only do it if you can afford to give that person 6K.

No matter how well you know them or trust them you have no idea what may happen in the future.

Original poster
Creole · 16/08/2014 19:56

Thank you all for your messages, you have opened my eyes. I also did a lot of research on it. Great advice all!

OP posts:
BuggersMuddle · 16/08/2014 23:09

Not unless you expect to pay it and can afford it.

I could be convinced to help out a DC with a first flat for example (I got similar help whereby parents basically channelled 'rent' into a guaranteed mortgage for me, which was a fantastic help for me and in their view, a better use of money).

A mate though or other relative, I'd be quite concerned. If you are rolling in dough and don't mind, that's one thing. If it's a big deal for you if they let you down, or you're worried about their money management skills I really wouldn't. I would hate to be round someone's house who owes me money and be wondering why they're eating fillet steak / drinking nice wine for example while I'm guaranteeing a missed payment.... That's a completely made up example of course, but if you think they may default and you have to see their lifestyle regularly, it's a consideration.

Fluffycloudland77 · 17/08/2014 08:52

I knew someone who did it & the person defaulted so they had to pay up.

She was on a low wage herself but was trying to help a girl escape a violent partner who was trying to get her pg so he could stay in the country.

Abilly72 · 21/08/2014 18:18

General Mmoney Rule Number One.............never be a guarantor.
If you really feel you must or are honour bound to do so then after doing so and prepare to pay the debt.

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