Loans with a Guarantor
If you have a low credit score or have no credit history, a guarantor loan online could enable you to apply for the amount of money you need, up to £5,000.
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We are committed to helping all our customers find the best deal available in the shortest possible time. We know from experience that most applicants, whether for an unsecured or guarantor payday loan, need extra funds because of an emergency. The need for the extra cash can be triggered by an unexpected car or house repair bill, a medical or vet bill, or a family emergency.
A quick loan can offer an ideal solution to help your family keep their heads above water until you can get back on top of your finances. Short term loans are not a good solution to long-term financial difficulties. If you need help to control your finances, then you should look at one of the free debt advice services. They can help you regain control of your situation.
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Will I be Approved?
The online Eligibility Checker is free and takes 60 seconds. Find out if you’ll be approved with no credit footprint.
Check EligibilityGuarantor Loans with no credit history
Having a low credit score or no credit history can make borrowing money difficult. A bad credit guarantor loan could help you access the funds you’re looking for, subject to credit and affordability checks.
Young people who have not yet built up a credit history could find a bad credit guarantor loan useful. Parents are often the go-to in such instances but friends or other relatives can be considered as a guarantor also. Those with past credit problems may also consider guarantor loans.
Our broker has designed the application process to provide our customers with access to their guarantor loan in the shortest possible time. You can complete everything online, you can even use your smartphone or tablet, without the need for any additional forms, paperwork, or meetings.
How it Works
We know you need your money as soon as possible. That’s why we have designed our website to be fast and simple.
Apply Online
Fill out our short, secure form and search an industry-leading panel of lenders to find your loan.
Check Your Offer
Once you have your offer from the lender, you can review the offer and get your cash.
Get Your Money
Once accepted, your money can often be paid into your account the same day.
Guarantor Loans for Bad Credit
Finding a loan can be hard when you have a low credit score or little credit history. A guarantor loan is one way to borrow with the support of someone you trust, and it could give you access to the funds you need.
At PaydayUK, we’re a credit broker, not a lender. We search an industry-leading panel of FCA-regulated lenders to help you find a guarantor loan that fits your circumstances, including options for people with bad credit.
Checking your eligibility takes about 60 seconds and uses a soft search only. A soft credit check won’t affect your credit score, so you can see your options with no risk to your credit file.
This page explains what a guarantor loan is, how one works, what your guarantor takes on, and what to think about before you apply.
What is a guarantor loan?
A guarantor loan is a loan that a second person helps to secure. That person, your guarantor, agrees to cover the repayments if you’re ever unable to make them yourself.
Because a lender has this extra security, a guarantor loan can be an option when your own credit history is thin or has some marks against it. It could help you borrow when you might not qualify on your own, and repaying it on time can help build your credit score.
Guarantor loans are often used by younger people who have not yet built up a credit history, and by anyone rebuilding after past credit difficulties. If you’ve been turned down elsewhere, a bad credit guarantor loan is one route worth understanding before you decide.
The guarantor is usually a close friend or family member with a stronger credit profile. They aren’t giving you money themselves. They’re promising the lender the loan will be repaid if you don’t.
How guarantor loans work
A guarantor loan works much like any other personal loan. You borrow an agreed amount and repay it in fixed monthly instalments over a set term. The difference is the third person named on the agreement.
When you apply, both you and your guarantor are assessed. The lender looks at your affordability and runs checks on your guarantor to make sure they could step in if needed. Your guarantor will usually need to give their consent, provide identification, and agree to the terms in writing.
With some lenders, the loan is first paid to the guarantor, who then passes it to you. This is a safeguard, and it’s also why many guarantor loan agreements include a short cooling-off period during which the money can be returned without penalty.
Once the loan is running, you make the monthly repayments as normal. Your guarantor is only asked to pay as a last resort, and only if you fall behind and can’t get back on track. Under FCA rules, lenders must offer support such as payment plans or a payment holiday before turning to your guarantor.
If you keep up with every payment, the loan can help demonstrate that you manage credit responsibly. If you’re facing an unexpected cost right now, you might also compare a quick loan or other short term loans to see which suits you best.
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How to apply for a guarantor loan with PaydayUK
Our application is quick and simple. You can complete it online from your phone, tablet, or computer, with no paperwork or meetings.
When you apply, we search our panel of lenders to find the offers you’re most likely to be accepted for. PaydayUK never charges you a fee for using our service. We’re paid a commission by the lender if you go ahead, so the service is completely free to you.
There are three simple steps.
- ● Apply online. Fill in our short, secure form and we’ll search an industry-leading panel of lenders to find your loan.
- ● Check your offer. If you’re matched, review the lender’s offer carefully, including the total amount repayable.
- ● Get your money. Once you accept and the lender completes their checks, funds can often reach your account the same day.
You’ll get an instant decision after applying. If you’d like to see where you stand first, our free eligibility checker takes 60 seconds and leaves no footprint on your credit file.
Who can be a guarantor?
Almost anyone can be a guarantor as long as they meet the lender’s criteria. Most people ask a parent, sibling, partner, or close friend. It should be someone you trust and can talk to openly about money.
Lenders want a guarantor who is financially stable, so a good credit history and a steady income both help. A guarantor is typically over 21, and some lenders prefer a guarantor who is a homeowner, though requirements vary from one lender to the next.
Your guarantor will go through their own checks as part of the application. They’ll usually need to confirm their identity, share some financial details, and formally agree to the responsibility before anything is finalised.
It’s worth having an honest conversation with your chosen guarantor early. Your guarantor is agreeing to a real financial commitment, so they should fully understand what they’re taking on before they say yes. If you can’t find someone suitable, you can also look at loans without a guarantor.
A guarantor’s responsibilities and risks
Being a guarantor carries real responsibility, both financial and personal.
A guarantor is jointly responsible for the loan. If you stop paying and can’t put things right, the lender can ask your guarantor to cover the outstanding balance, not just a single missed payment.
That can affect your guarantor’s own finances and, in some cases, their credit record. It can also strain your relationship, so choose the right person and keep them informed.
Guarantors are contacted only as a last resort. Most lenders will give you the chance to fix a missed payment before they ever approach your guarantor. The best way to protect them is to talk to your lender as soon as you think a payment might be a problem.
If money is getting tight, free and confidential help is available from MoneyHelper, StepChange, and Citizens Advice. Speaking to them early can stop a small issue from becoming a bigger one for both you and your guarantor.
Understanding the costs
Short-term borrowing can carry a high APR, and we believe in being upfront about that. The representative figure gives you a like-for-like way to compare the cost of borrowing.
Our representative example is borrowing £500 over 6 months at £106.79 per month. That’s a total repayable of £640.77, with £140.77 in interest, at an interest rate of 91% per year (fixed). Representative 91% APR.
Your own rate depends on the lender and your personal circumstances, so it may differ from the example above. Rates on our panel range from 9.3% APR up to a maximum of 1721% APR, and your no-obligation quote will be based on your situation.
Every lender on our panel follows the FCA price caps. Interest and fees are capped at 0.8% per day, default fees can’t exceed £15, and you’ll never repay more than double what you originally borrowed.
There are no hidden costs from us. PaydayUK offers loans from £50 to £5,000 over terms of 3 to 36 months, and the lender will show you the full cost before you commit to anything.
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What to look for when comparing guarantor loans
As with any loan, the most important question is whether you can comfortably afford the repayments. With a guarantor loan this matters even more, because a missed payment can eventually fall to your guarantor.
Look beyond the monthly figure to the total amount repayable over the full term. Two loans with similar monthly payments can cost very different amounts once you add up every instalment.
Check the APR, the length of the term, and whether you can repay early without a penalty. Paying a loan off sooner usually means paying less interest overall, so this flexibility can be valuable.
It also pays to understand exactly what your guarantor is agreeing to before you apply. A guarantor loan works best when both people go in with a clear, shared understanding of the commitment. If you only need a smaller sum, instalment loans spread over manageable payments may be a simpler fit.
Why choose PaydayUK for a guarantor loan
One application with us searches an industry-leading panel of lenders, rather than sending you to a single lender who may say no. This can improve your chances and saves you filling in form after form.
We use a soft search to match you, which protects your credit score while you explore your options. You’re under no obligation to accept any offer we find for you.
We’ve helped over 1 million customers since 2020, we hold a rating of 4.7 out of 5 on Trustpilot from more than 6,281 reviews, and we process over 7,500 loan applications every day.
PaydayUK is a registered trading name of Payday Loans Ltd, an Appointed Representative of Flux Funding Limited (FRN 806333), which is authorised and regulated by the Financial Conduct Authority. Our FCA reference number is 921539, and every lender on our panel is FCA-authorised too.
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
Alternatives to consider
A guarantor loan isn’t the only option, and it won’t be right for everyone. It’s always worth weighing up the alternatives before you borrow.
If you’d rather not involve someone else, you could compare loans without a guarantor or specialist loans for bad credit. Both are designed for people with a low credit score who want to borrow in their own name.
Local credit unions often offer lower rates than other short-term lenders and are worth checking. Borrowing from family or a friend, with clear repayment terms agreed in advance, can also avoid interest altogether.
If the pressure is coming from bills you’re struggling to keep up with, your creditors may agree a payment plan. Free debt advice from MoneyHelper, StepChange, or Citizens Advice can help you find the right path if you need to borrow money or simply get back in control.
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Frequently Asked Questions About Guarantor Loans
A guarantor loan is used when a direct lender wants some extra security for the money they are loaning to the applicant. If the person applying needs a bad credit loan, a lender might ask for a guarantor that has good credit as a safety net. A lot of young people who are borrowing money for the first time use a guarantor loan. It allows them to start building their credit history.
In theory yes, anybody can be a guarantor as long as they meet the lender’s criteria. Most people ask a family member or close friend to act as a guarantor for them. Your guarantor should be financially stable. People tend to ask someone close to them because our finances can be a sensitive topic, so it must be someone you trust and can talk to openly.
Every direct lender has its requirements and having a guarantor doesn’t automatically mean you’ll be able to borrow more money. Some lenders will require you opt for a guarantor loan regardless of the amount you borrow, while other direct lenders don’t accept guarantors. You are more likely to be asked to provide a guarantor for a loan for a higher amount.
You must contact your lender as soon as you realise you are going to have difficulty making a payment. If you fail to pay and are unresponsive to the lender’s attempts to contact you, then the lender can go to the guarantor for the overdue money. However, excellent communication can help you avoid this. It’s typically much easier and cheaper to solve an issue with the help of your lender, as this shows them you are being honest and have a genuine desire to pay. If you fail to pay and ignore the lender, they may make presumptions that aren’t true.
The guarantor is only contacted as a last resort. Most lenders will give you a chance to correct the situation before they try to recover any funds from your guarantor.
No. There’s a wide variety of lenders that offer guarantor loans, but the requirements of lenders with different specialisms can vary quite a bit. All the direct lenders we work with are registered with the FCA (Financial Conduct Authority) and will always be transparent about your loan. If you have any questions you can’t find the answer to, simply contact them to clarify the point.
Whether or not you have a guarantor is rarely the most significant factor that dictates the interest rate you’ll be charged on a guarantor loan. However, having a guarantor with a good credit history does reduce the risk to the lender, which can help to reduce the interest rate. A loans APR rate is generally set depending on your circumstances. Most lenders only ask for a guarantor to help you secure the loan when your risk profile falls within the relevant parameters.
There are many direct lenders on our brokers panel that specialise in providing loans to people with bad credit. Some will require a guarantor, others will be happy to grant you a loan without a guarantor. When you apply for a loan via Payday UK, you will be presented with the best offer available for you. It will tell you if a guarantor is required.
The application process for a guarantor payday loan can be completed online very quickly. Most applicants have the money in their account on the same day. Payday UK and our brokers panel of direct lenders have worked hard to simplify and streamline the application process as much as possible. Once you’ve completed our online application, you’ll receive an instant decision, and if accepted, you’ll be shown a loan offer for the best loan available to you.
When you apply for a bad credit guarantor loan, it will not affect your credit report. This is because Payday UK broker’s lenders initially only perform a soft credit check. This gives enough information to see which lenders can offer you a loan. After you have accepted a loan offer, the direct lender is required by the FCA (Financial Conduct Authority) to perform a full credit check before releasing any funds.
A direct lender only performs a full credit check if you accept the loan offer, so you’ll already know you meet all the criteria for the guarantor loan. If you make all the repayments as agreed the guarantor loan will improve your credit score. However, if you default on the loan or fail to stick to the repayment schedule, and don’t make contact with the lender to resolve the issue, it could harm your credit rating.
Loan guides
These guides will help you find out more about the different types of loan and lenders available.
