What is a guarantor loan?
A guarantor loan is a type of unsecured loan, where someone else agrees to make repayments on the borrower’s behalf if the borrower is unable to. This is usually someone you trust, such as a family member or friend, with a good credit score. Often guarantor loans are used if the borrower has a bad or no credit rating and is struggling to be accepted for a personal loan.
While the borrower can still afford the repayments themselves, they are more likely to be accepted for a larger loan as the lender has an additional security for repayments to be met in place.