Guarantor taking out their own loan?

[SapphireFire]

Hi, I'm posting here because I'm absolutely desperate for advice.

A few years ago I took out a guarantor loan with my sister as guarantor. Stupid thing to do but I was unwell at the time.

I'm paying it off regularly but there's still a fair chunk of time to go.

The problem has now arisen because my sister wants to take out a loan herself (not a stupid high interest one) because she desperately needs a new car.

I can't find a new guarantor and I can't afford to pay it off any quicker. The payments are crippling as it is.

So - my question. Will she be able to take out a loan whilst being my guarantor?? Is there any way to get her out of the agreement?

I'm so desperate for advice.

Anyone??

If you have been paying for a few years has that improved your credit rating enough to get a a loan with a better repayment rate to pay off your first one (if that makes sense!).

She may well be able to take out a loan, but yours will also be taken into account when it comes to whether or not she can afford to service the loan. Legally she could end up having to pay both loans, and her bank will need to consider if she could.

If she has a good enough credit rating, she will have no problem taking out a loan for herself. As PP has said, being a guarantor will be taken into account but there are so many factors they consider, I wouldn't worry too much about it.

My mum was a guarantor on my car finance payments a few years ago, I did actually miss a few payments which she was then liable for and she still managed to take out a loan herself.

Thank you so much!

Was your mum able to take out a low APR rate loan?

My sister's credit rating is good or very good.

Can your sister afford to take a bigger loan to buy her car and also pay off your loan, if it would save interest? You then continue to pay her as if you are paying back your loan, but hopefully it will work out less if the interest rate is lower.

Advice now is if a guarantor loan is needed that the guarantor takes out the loan themselves as the interest rate will be much lower and the risk to them is the same as if the person with bad credit doesn't pay, they have to pay the loan either way. The person who needs the loan just needs to set up a standing order to the guarantor. Does need a slightly greater degree of trust as the bad credit person won't get any communications from the loan company, but otherwise, finanially, it's much cheaper.