Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Kr94
    • By Kr94 9th Feb 18, 8:42 PM
    • 2Posts
    • 9Thanks
    Kr94
    Asked to be a guarantor - how to say no
    • #1
    • 9th Feb 18, 8:42 PM
    Asked to be a guarantor - how to say no 9th Feb 18 at 8:42 PM
    Hi all!
    First post and thread.
    The short version is that a friend of mine has run into a money issue, and has asked me to be a guarantor for a payday loan to the value of £1250.
    Equating to £77 a month for 24 months including interest.
    I initially agreed to it to help out, but haven't gone through the application etc
    Although he swears he will pay this and pay it off early (no early repayment fee)
    I have a feeling that it won't be as simple as that, and am very uncomfortable going ahead with it.

    It's not that I don't want to help him in this pinch, or that the £77 would be too much of a loss,
    I simply do not feel comfortable with it.
    What can I do in this situation whereas not to break friends but also not put myself into a potentially monthly uncomfortable situation?
    Any and all advice is welcomed!
    Thanks!
Page 1
    • martinthebandit
    • By martinthebandit 9th Feb 18, 8:52 PM
    • 3,392 Posts
    • 5,755 Thanks
    martinthebandit
    • #2
    • 9th Feb 18, 8:52 PM
    • #2
    • 9th Feb 18, 8:52 PM
    Just say sorry I am not comfortable doing that

    If they are a friend they will understand and accept.
    Politics -
    from the words Poli, meaning many
    and tics meaning blood sucking parasites


    (thanks to Kinky Friedman (or Larry Hardman) for the quote}
    • DCFC79
    • By DCFC79 9th Feb 18, 8:54 PM
    • 30,935 Posts
    • 19,561 Thanks
    DCFC79
    • #3
    • 9th Feb 18, 8:54 PM
    • #3
    • 9th Feb 18, 8:54 PM
    Just say your not comfortable with it.

    Offer to look at his finances and look what can be cut back on.
    Last edited by DCFC79; 09-02-2018 at 9:48 PM.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • Owain Moneysaver
    • By Owain Moneysaver 9th Feb 18, 8:59 PM
    • 7,769 Posts
    • 8,470 Thanks
    Owain Moneysaver
    • #4
    • 9th Feb 18, 8:59 PM
    • #4
    • 9th Feb 18, 8:59 PM
    It's not £77 a month, if the friend defaults on the loan repayments the full amount outstanding probably becomes due immediately, plus late payment and debt collection fees.

    If you lent your friend the £1250 at least that would be all you would lose if he didn't pay you back.
    A kind word lasts a minute, a skelped erse is sair for a day.
    • Hoogle
    • By Hoogle 9th Feb 18, 9:04 PM
    • 166 Posts
    • 153 Thanks
    Hoogle
    • #5
    • 9th Feb 18, 9:04 PM
    • #5
    • 9th Feb 18, 9:04 PM
    If he was to default you will get a demand for full balance and interest and fees so if he defaulted on 2nd month you would be liable for probably over £2500 possibly even more.

    You can say that you cant have a pay day loan on your credit file it is not really a solid excuse if you can't just say no then you could use it I guess.
    • keepcalmandstayoutofdebt
    • By keepcalmandstayoutofdebt 9th Feb 18, 9:05 PM
    • 3,020 Posts
    • 1,576 Thanks
    keepcalmandstayoutofdebt
    • #6
    • 9th Feb 18, 9:05 PM
    • #6
    • 9th Feb 18, 9:05 PM
    Find out why they have money worries? See if you can help them out in other ways beside hard cash.

    If your credit is in good condition, why don't you take out a loan on more favourable interest and terms for you?

    Even my Mum knew never to be a guarantor unless it was helping out her hard up sister in property/rent paying alone. Mum helped until she retired and had to surrender and now the idea of helping is every so often my parents will do a big shop for mum's sister.
    "If you are caught in a rainstorm, once you accept that you'll receive a soaking, the only thing left to do is enjoy the walk"
    • Kr94
    • By Kr94 9th Feb 18, 9:06 PM
    • 2 Posts
    • 9 Thanks
    Kr94
    • #7
    • 9th Feb 18, 9:06 PM
    • #7
    • 9th Feb 18, 9:06 PM
    Thank you for the advice all!
    Had no idea it could become repayable in full - that I absolutely cannot afford.
    If anything absolutely confirmed I'm not doing it now.
    And now that's settled, off to the pub!
    • Money maker
    • By Money maker 9th Feb 18, 9:18 PM
    • 4,922 Posts
    • 11,212 Thanks
    Money maker
    • #8
    • 9th Feb 18, 9:18 PM
    • #8
    • 9th Feb 18, 9:18 PM
    If your credit is in good condition, why don't you take out a loan on more favourable interest and terms for you?
    Originally posted by keepcalmandstayoutofdebt
    Just do not do this either, it is as stupid an idea as being a guarantor. Either give them the cash and accept it is gone or say that sorry, you cannot help. Never take out a loan for someone else - ever.
    Please do not quote spam as this enables it to 'live on' once the spam post is removed.

    If you quote me, don't forget the capital 'M'

    Declutterers of the world - unite!
    • Cakeguts
    • By Cakeguts 9th Feb 18, 9:21 PM
    • 3,765 Posts
    • 5,205 Thanks
    Cakeguts
    • #9
    • 9th Feb 18, 9:21 PM
    • #9
    • 9th Feb 18, 9:21 PM
    Never ever get involved with lending money to a friend or helping them to borrow money if you want to remain friends. If they are a real friend they will understand why you don't want to do this.
    • DCFC79
    • By DCFC79 9th Feb 18, 9:46 PM
    • 30,935 Posts
    • 19,561 Thanks
    DCFC79
    Never ever get involved with lending money to a friend or helping them to borrow money if you want to remain friends. If they are a real friend they will understand why you don't want to do this.
    Originally posted by Cakeguts
    If going to lend money either do it as a gift or be prepared to lose it.
    Can people stop loaning money/being a guarator to family/friends, it rarely ends well and you lose out as your money is gone or you get shafted with being a guarantor.
    • poppasmurf_bewdley
    • By poppasmurf_bewdley 10th Feb 18, 10:42 AM
    • 5,114 Posts
    • 5,261 Thanks
    poppasmurf_bewdley
    If this friend has got this 'money issue' and is having to go to a pay day loan company, then it means his credit is shot already, which is why no main stream loan company will offer him anything.

    If his credit is shot, that means he'd not been paying his bills, which means he won't pay this one either.

    And if he takes exception to you not being a guarantor for him, then he's not much of a friend anyway and you're better off without him.
    "There are not enough superlatives in the English language to describe a 'Princess Coronation' locomotive in full cry. We shall never see their like again". O S Nock
    • grahamgoo
    • By grahamgoo 10th Feb 18, 10:49 AM
    • 285 Posts
    • 150 Thanks
    grahamgoo
    Thank you for the advice all!
    Had no idea it could become repayable in full - that I absolutely cannot afford.
    If anything absolutely confirmed I'm not doing it now.
    And now that's settled, off to the pub!
    Originally posted by Kr94
    Definitely the right thing to do. So many past stories on here of loans to friends gone wrong. If they are a real good friend in genuine need then consider gifting them an amount with optional repayment but being guarantor to a large amount is a recipe for grief and stress.
    • dresdendave
    • By dresdendave 10th Feb 18, 11:50 AM
    • 709 Posts
    • 847 Thanks
    dresdendave
    As per every other reply, don't be a guarantor. If your friend takes offence they weren't a real friend in the first place.

    Many people run into money issues due to unexpected events, if they are financially responsible they resolve them by (ideally) using savings, or a CC, authorised OD or a loan from a mainstream lender.

    If they have to resort to a guarantor loan it suggests this is not a one off situation and they have a history of poor financial management (defaulting) in the past.

    If you really want to help, sit down with them and review their outgoings and look for savings. Many people run out of money because they spend it on the wrong things, not because they don't have enough. Getting your friend to post an SOA on the DFW board will benefit him in the long run far more than bailing him out of his latest crisis.

    By all means offer assistance, after all that's what friendship is about, just don't let your finances get mixed up with his.
    Last edited by dresdendave; 10-02-2018 at 11:51 AM. Reason: Syntax
    • Missus Hyde
    • By Missus Hyde 10th Feb 18, 12:28 PM
    • 338 Posts
    • 454 Thanks
    Missus Hyde
    Never ever get involved with lending money to a friend or helping them to borrow money if you want to remain friends. If they are a real friend they will understand why you don't want to do this.
    Originally posted by Cakeguts
    If going to lend money either do it as a gift or be prepared to lose it.
    Originally posted by DCFC79
    Definitely the right thing to do. So many past stories on here of loans to friends gone wrong. If they are a real good friend in genuine need then consider gifting them an amount with optional repayment but being guarantor to a large amount is a recipe for grief and stress.
    Originally posted by grahamgoo
    Couldn’t agree more - never, ever be a guarantor for any loan for a friend, especially from a pay day lender.

    If you really feel that you must help your friend with a loan, then the best thing is to gift them the money, with the proviso that they pay you back if and when they can afford it and don’t expect to get any repayment from them.

    Then if they are able to repay you, you can be pleasantly surprised and your friendship will remain intact whatever the outcome. (I have actually done this myself and was paid back - much to my surprise! )
    It's a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to, than I have ever known........Sydney Carton.
    • kuohu
    • By kuohu 10th Feb 18, 12:58 PM
    • 872 Posts
    • 486 Thanks
    kuohu
    Be like Zammo.

    Just say No.
    DFW Nerd 035
    • Ilona
    • By Ilona 10th Feb 18, 1:23 PM
    • 2,024 Posts
    • 6,970 Thanks
    Ilona
    Thank you for the advice all!
    Had no idea it could become repayable in full - that I absolutely cannot afford.
    If anything absolutely confirmed I'm not doing it now.
    And now that's settled, off to the pub!
    Originally posted by Kr94
    Enjoy your pint or six, but be careful, do not cave in when you are intoxicated.

    Ilona
    I love skip diving
    • fozmcfc
    • By fozmcfc 10th Feb 18, 3:26 PM
    • 2,998 Posts
    • 2,188 Thanks
    fozmcfc
    Surely a payday loan isn't over 24 months. It a month or possibly 3 months at a stretch, but not 24.

    Sounds like it's more just a high interest loan from one of a handful of legit companies who offer these.

    Whilst I still say NO absolutely don't do it, I would imagine that you could still pay £77 a month if your friend defaulted. Of course it will lead to you probably paying many months and a possible loss of friendship.
    • nic_c
    • By nic_c 10th Feb 18, 3:43 PM
    • 1,229 Posts
    • 686 Thanks
    nic_c
    The replies are unanimous, yet the question is still asked, I suppose because of how these guarantor loans are marketed. Such "doing a friend a favour" or idea sold to the debtor as simply an easy way to get the loan if your credit file isn't up to it.

    Guarantor loans are higher APR loans than the guarantor could get by themselves, because its a bad credit loan. If someone needs a guarantor then it is likely because they are at high risk of defaulting, so it is better getting the money yourself and giving it to them than been a guarantor. Strange thing is people don't like doing that as there is nothing to guarantee they will be paid but believe there is with a guarantor loan. Usually if the debtor defaults they come straight for the guarantor, by which time high interest rates and fees have inflated the cost a lot.
    • Soot2006
    • By Soot2006 10th Feb 18, 4:07 PM
    • 1,229 Posts
    • 1,229 Thanks
    Soot2006
    As above no no no

    My friend was in this position and struggled to say no and ended up lying on the application to make sure he failed the guarantor check (incorrect address etc) ... So silly. Much easier to say no and making sure you don't put yourself in a silly position.
    • badmemory
    • By badmemory 10th Feb 18, 6:41 PM
    • 1,349 Posts
    • 1,602 Thanks
    badmemory
    To guarantee a loan generally means losing a friend & losing money too. Never do it unless you can afford to throw the money away.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

5,290Posts Today

6,972Users online

Martin's Twitter