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Guarantor loans

Guarantor loans help those with poor credit scores to borrow money, by allowing a friend or family member to guarantee the loan repayments.

I want to borrow:

£

Over how long?

Loans displayed from 6 companies with term lengths between a minimum 1 year and maximum 5 years with a maximum 49.9% APR. How our loans calculator works.

How our loans calculator works

Our loans comparison shows how much each loan is likely to cost per month and in total. The amount we show is based on these assumptions:

  • The representative APR is the interest rate you'll be given
  • The loan amount you entered is the exact amount you'll borrow
  • You won't make any late or early repayments
  • You won't fail to make any of your loan repayments
  • You won't repay the loan before the end of the term
  • You won't make any overpayments or underpayments

Our comparison shows how much each loan should cost you, but the amount could be different if the way you repay it varies from the above assumptions. The amount could also be different if the lender offers you a different interest rate to the APR.

Warning: Late repayments can cause you serious money problems. If you fall behind on your mortgage or debts secured against your home, it may be repossessed. For more information see our debt help guides.

uSwitch Limited is a credit broker, not a lender, for consumer credit products. Our services are provided at no cost to you, but we may receive a commission from the companies we refer you to. For some loans a broker fee of up to 12.5% may be added to the cost of the loan.

Our providers

1plus1 Loans
1st Stop
1st Stop Personal Loans
AA
Amigo
Aspire Money
Bamboo Loans
Central Trust Ltd
Fluent Loans
George Banco
Guarantormyloan
HSBC
Likely Loans
M&S Bank
Masthaven Bank Ltd
Monevo
My Car Credit
Nationwide
NatWest
Norton Home Loans
Optimum Credit Ltd
Paragon Bank PLC
Post Office
Prestige Finance Limited
RateSetter
Sainsbury's Bank
Shawbrook Bank Limited
Step One Finance Limited
Suco
Tesco Bank
TFS Loans
Together
TRUSTTWO
UK Credit Limited
United Trust Bank
West One Secured Loans Limited
Zopa
Zuto

What are guarantor loans?

Guarantor loans are a type of personal loan typically used by people with a bad credit history who find getting other types of loans difficult.

The key feature of a guarantor loan is that the person with bad credit needs someone to agree to pay their loan if they are unable to. This person is known as a guarantor.

For borrowers with a poor credit history, guarantor loans offer an alternative way to get access to cash. They are becoming increasingly common, meaning there are more options to compare costs and charges and get the best guarantor loan for your circumstances.

Is a guarantor loan the best loan for me?

If you have a bad credit history and you know someone who is willing to act as a guarantor this type of loan could be suitable if you need to borrow from around £1,000 to around £10,000.

You will need to supply the details of your guarantor when you apply for the loan. They will have to agree to repay your guarantor loan if you can’t. Because loans with a guarantor reduce the risk for the lender, they are able to offer you lower interest rates than you could obtain elsewhere.

Your guarantor will not normally be involved in repaying your loan and only be asked to make payments as a last resort if you miss installments.

Who is the best person to ask to be a guarantor?

A guarantor is usually a close friend or family member who trusts you to keep up with your repayments, but it can be anyone. Relatives of those with bad credit can act as a guarantor but you cannot use anyone who is financially linked to you, such as a husband or wife.

Typically, guarantors must be aged over 21 with a good credit history, and preferably be a homeowner. Lenders will carry out a credit check on the guarantor to confirm they have a good credit score, and can afford the repayments of the loan if the bad credit borrower can’t. A guarantor will need to provide identification, proof of address, bank statements and other details.

Lenders to borrowers with bad credit prefer a guarantor who is a UK homeowner. If the loan is secured, a lender will ask that the guarantor have enough equity in their home to match the value of your loan.

I have bad credit. Is it best to use a guarantor loan?

Guarantor loans are targeted at those who have a bad credit score, for example a history of missing repayments, and who have been turned down by mainstream lenders. This is why they are often known as bad credit guarantor loans.

Having a guarantor agree to vouch for your intention to repay the loan – and agree to pay the money back if you don’t – can help you get approved for a loan.

How much do guarantor loans cost?

Guarantor loans are still very expensive compared to standard personal loans or credit cards, with typical APRs, or annual percentage rates of up to 50%.

The reason they have become more widely used is because it makes it possible for people with bad credit to be approved for a loan. And with so many lenders offering guarantor loans, it gives borrowers more options to compare loans, and find a low interest guarantor loan.

How does a guarantor loan compare to other loans?

Borrowers with a bad credit history can use a guarantor loan to access cash they may otherwise struggle to borrow. Repaying a guarantor loan will not be as cheap as other loans. However, repaying the loan installments can help rebuild your credit score, giving you access to cheap loan rates in future.

Rebuilding your financial history from a bad credit score into a good credit rating will make it more likely you'll be accepted for mainstream unsecured loans and credit cards – which will eventually let you borrow at significantly cheaper interest rates.

Borrowing money actually helps to rebuild a bad credit score, but only if you borrow responsibly in a way that you are able to make repayments on time.

Check your credit score before applying for any form of credit. Looking over your credit history may reveal it is in better shape than you think, and allow you to find and fix any problems on your record.

Compare the available guarantor loans using the tool above to see if there is one to suit your budget and needs.

What are the risks of a guarantor loan?

Loans with a guarantor need to be considered carefully. Failure to repay the loan affects both the original borrower and the guarantor.

Choose a guarantor you have a good relationship with and honestly explain the risks to them of agreeing to vouch for your ability to repay the loan. If the worst happens and you default on your payments they could end up having to pay instead, or, if they can’t afford to, could even lose their home.

Having a bad credit history makes it even more important to borrow responsibly, starting small and gradually working up to borrowing larger amounts only if needed. Think carefully about how much you are borrowing. If you are struggling with your existing debts our guide on getting out of debt could be useful, or speak to one of these debt help organisations.