- Apply for £1000 – £20000
- Get 3-4 offers in 60 seconds
- Loans from 19.9% APR
- Same deals as going direct
- No Fees§ or Obligation
- Rep. 39.9% APR
How much would you like to borrow?
How long for? (months)
This tool is for guidance ONLY. It is designed to help you estimate loan repayments. It uses the representative APR of the product. Lenders have a duty to conduct affordability checks when you apply for a loan.
Representative example: Borrow £3,000 over 36 months. Repay £144.16 per month. Total charge for credit will be £2,189.76. Total amount repayable is £5,189.76. Interest rate 34.05% (vrbl). Representative APR 39.9% (vrbl)
What is a Guarantor Loan?
A guarantor loan is a personal loan where another person guarantees to make the monthly repayments if you become unable to. This type of loan is an option if you don’t have a credit history yet or have had credit problems in the past.
Lenders are more likely to lend to you if you are able to provide a third party who will guarantee the repayments. This is because the risks to the lender are reduced. Both you and your guarantor sign the credit agreement. This is why your guarantor is likely to be a family member or close friend who knows you well.
Only if you default on your payments will your guarantor be asked to step in to pay them. Such a situation could affect both your and your guarantor’s credit ratings. However, this type of debt is unsecured so neither your home nor any other asset is at risk.
The Best Guarantor Loan Deals
All the UK’s leading guarantor loan lenders work with us and have done for over a decade. Our clever technology means that with just one short application we can show you which lenders will lend in principle and you can see what the best deals are.
Don’t waste time going from one lender website to another – we’ll do the hard work for you. And there are no fees! We have loans from £1,000 to £20,000, rates from 19.9% and a variety of deals that can help both non-homeowners and homeowners.
Why Consider a Guarantor Loan?
There are other types of unsecured loans for those with credit rating issues. However, they are not always accessible or indeed available at a price that you may be prepared to pay. So, there are a number of reasons why a guarantor loan could be right for you:
- Loans are specifically designed to cater for people who have credit problem or who are of an age where they have not yet built up a credit rating
- You are much more likely to be accepted for a loan if you can provide a guarantor
- Loans are unsecured so you are not putting any assets at risk e.g. your home, car or jewellery
- It is likely to be a cheaper way to borrow than with some other forms of bad credit unsecured loan
How to Compare Guarantor Loans: 4 Quick Steps
We make it easy to compare. We’ll show you only those lenders who can help in principle. Enquiries typically generate 3-4 loan options. We won’t waste your time by showing you those who won’t lend.
2: Compare Your Loan Offers
We'll list the lenders who can help. You compare and choose your preferred options.
3: Complete Your Application
Click straight through to your lender and complete the final stage of your application.
4: Get Your Money
Most lenders are now able to pay out your loan the same day, subject to acceptance & any extra checks.
Why use Solution Loans?
Why trudge from one lender website to the next when Solution Loans can find you the cheapest deals instantly? It’s simple to see why using our comparison service makes sense:
- We’re free to use and there’s no obligation!
- We cover all the UK’s best-known lenders, giving you the widest choice
- A single enquiry typically generates 3 to 4 loan offers in principle
- Our short form takes just 60 seconds to complete
- It’s quick and easy to compare lender offers
- You get the same deals as going direct, but much quicker!
- You can instantly complete your loan application after choosing your lender
- You can sign your loan agreement online to minimise any delay in getting the funds
How do Guarantor Loans work?
- Provide a loan guarantor who can be a homeowner or non-homeowner – see more detailed criteria. i
- No need for any assets (e.g. house, car, jewellery) to be provided as security – loan is unsecured, so you don’t need to own your home. i
- Borrow from £1,000 to £20,000 (you could get more with a personal loan but a high credit score is needed). i
- Repayment periods of 1 to 7 years (12 to 84 months) – see estimates of loan repayments.
- Instant decision in principle – our enquiry form will give you instant responses from all our lenders simultaneously! You can then compare loan offers and take the best deal. i
- Get your loan within 24 hours (subject to your application being accepted). i
- FREE service – No fees or charges§ – you get the same rate as going direct. And there’s no obligation. i
- Representative APR 39.9% (with rates from 19.9% APR)
Is a Guarantor Loan Right for You?
There are many options to get an unsecured loan – from banks, building societies and other lenders. But if you’ve missed any repayments when you borrowed before, or if you’ve never taken out a financial product (i.e. you haven’t developed a credit history), you might struggle to get one.
You may be rejected, no matter how many lenders you apply to, and even if you’re successful, you might only be able to get a loan that’s painfully expensive.
However, a guarantor loan may allow you to get an unsecured loan at a more reasonable interest rate (what lenders call the APR – the annual percentage rate). The lender will be able to offer you a lower APR because you provide a guarantor.
This guarantee reduces the risk for a lender and enables you to borrow at more affordable rates – and avoid potentially larger repayments down the line.
Still unsure? Check and explore other loan options.
How to Find the Best Guarantor Loans
First, think about how much you can repay each month that’s affordable for you. Then you need to look for a loan with the lowest total repayments. The interest cost of your loan is affected by four things:
- Loan amount: the more you borrow the more you have to repay. Our lenders offer loan amounts in the range of £1,000 to £20,000. Only borrow what you really need. This will help to lower your cost.
- APR: this is the interest rate and the higher it is the higher your monthly repayments and the total amount you will repay. You need to check your budget can afford these monthly payments.
- Loan term: the longer you borrow for the more interest you will pay. Try to keep this to a minimum to ensure you pay as little as possible.
- Your lender: different lenders offer different APR% for a given loan amount. We can help you find the cheapest lender.
Use our loan calculator to estimate your monthly repayments. Then you can better judge if your loan is affordable.
A Loan for a Bad Credit History?
So you’ve had credit problems and are frustrated with lenders who’ve refused to give you a loan. You don’t believe that the problems you’ve had in the past should have any bearing on the future. You’re right! They don’t have to.
It can give you access to money now, and as long you keep up repayments, it can help you borrow more cheaply in future as your credit score improves.
- Guarantor loans are now considered to be a mainstream option for people with a bad credit history.
- We estimate that over 500,000 people in the UK have or have had a guarantor loan.
- Not only can a guarantor loan get you the credit you need now, but it can also help enhance your credit score.
- You can be a tenant, be living with others or a be homeowner.
What a loan with a guarantor does is break the link between your financial past and your financial future. Less reliance is put on scores (in most situations) and more weight on your ability to:
- afford the monthly repayments
- obtain an acceptable guarantor
Rebuild Your Credit Score
Making your repayments on time and ensuring your loan is fully paid off is one of the best ways to improve your credit score. Your credit score won’t improve overnight though. You need to keep making repayments on time every month and gradually, you should see it improve. A guarantor loan, with a record of regular repayments, can help you borrow at a lower APR in future.
So, if you are one of the millions of people in the UK who have a poor credit score then a guarantor loan could help you. We work with 99% of all the UK’s respected lenders.
Guarantor Loans Guide
If you’re uncertain which type of credit might suit you or you have a money problem then one of the guides may help you. We summarise each type of loan and their pros and cons and address issues regarding debt and credit ratings.
Guarantor Loan FAQs
Also see our more detailed applicant questions page.
For someone with a poor credit status an unsecured loan with a guarantor is likely to offer a low APR / low rate than other forms of borrowing. The representative APR for this type of finance is in the region of 19.9% to 54.9% which is lower than the 70+% that is typically charged for non-guarantor unsecured loans.
Nobody is saying that 19.9% is a low-interest rate nor that this is cheap, but for someone who has an impaired credit status, they may be the cheapest type of borrowing they can reasonably expect to qualify for.
Borrowing is always subject to an affordability assessment as well as a credit check.
We would argue that guarantor loans aren’t expensive, certainly not compared to many of the alternative unsecured loans for a borrower who has historic credit problems. A bad credit personal loan that does not require a guarantor could have an APR of around 70% or more. These days a guarantor loan is typically around 40% APR.
We have lenders who offer guarantor loans as low as 19.9% (although that is for a situation where both the borrower and guarantor are homeowners, and for a loan of around £20,000). Over the last decade, competition has driven rates lower as lenders have fought for market share.
The rules in relation to your credit rating are little different for a guarantor loan than any other form of credit:
- The act of applying for a loan will itself be registered on your credit file unless the lender is only doing a so-called “soft search”. Too many applications in too short a time can adversely affect your credit rating.
- Once you have credit you must meet the repayment terms. Your credit repayment behaviour, good or bad, is recorded in your credit file. This will be visible to future credit providers and could affect future lending decisions.
Obviously finding a guarantor is the key to unlocking this loan opportunity. If you don’t think you can find a guarantor you may be surprised to hear that over 500,000 have or have had a guarantor loan. If they can find guarantors then so can you.
So, who is the perfect guarantor?
- Aged 18 to 70 (exact age limits vary by lender)
- They know you well and trust you – e.g. family member, close friend or co-worker. But they can’t be financially linked to you, so your spouse can’t be your guarantor.
- They have a good credit rating
- They meet minimum income requirements (vary by lender), but their income does not have to come from employment. They could for instance be retired and drawing their pension or have investment income.
- Homeowners are the best choice, but more and more lenders are happy to accept non-homeowner guarantors although you may not be able to borrow as much or get the lowest rate.
We’d recommend that you start with a broad list of names and then narrow it down to a shortlist. Have one or two reserves in case your first choice is not accepted by your lender. Lenders are likely to have different criteria. Also, make sure that your guarantor is fully aware of their responsibility by showing them this guide and that they really are happy to do it.
No! Our enquiry form does not require the information and our lenders can accept you in principle without a guarantor’s details. However, we would recommend that you start to consider which family members or friends to approach. The sooner you sort this out the sooner you can complete your application and the sooner the lender could payout your loan.
If right now you don’t think you could find one then consider this – our research suggests that over 10% of actual borrowers also initially thought they couldn’t find one!
These days guarantors don’t have to be homeowners, which opens up more opportunities. But if you really don’t think you will be able to find one then consider instead a bad credit personal loan.
The loan agreement is a 3-way agreement between you, your lender and your guarantor that ensures each party fully understands their obligations.
As such your repayment behaviour has the potential to impact not only your credit rating but also the ability of your guarantor to get credit. So long as you make your routine payments in full and on time your credit rating will improve and that of your guarantor will be unaffected. But consider what happens if you default on payments and your guarantor is obliged to make them for you. Your credit rating will take a hit and your guarantor may find it harder to get credit for themselves because judged to be less able to afford it.
Sometimes guarantor loans are mistakenly called “Guaranteed”. Nothing is guaranteed as the lending decision will always include an assessment by the lender of your ability to repay the loan (the so-called affordability check), and their approval of your proposed guarantor.
The term “guarantor” relates to providing someone to guarantee the loan repayments in case the borrower themselves fail to make them. In that sense, the loan is guaranteed. It does not mean you are guaranteed to get a loan.
As with any credit you need to be able to demonstrate that the repayments are affordable, and in the case of a guarantor loan, that your guarantor meets all the lender’s criteria.
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