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  • 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 2
    • ampersand
    • By ampersand 10th Feb 18, 6:50 PM
    • 8,343 Posts
    • 32,336 Thanks
    ampersand
    The best thing you can BOTH do is come here to mse.

    Your friend needs to post an SOA.

    You may need to, too.

    Well done on coming for advice. I repeat, sending your friend here is even more important and something for which he should thank you even more.

    Good luck.
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    • Hoogle
    • By Hoogle 10th Feb 18, 7:38 PM
    • 165 Posts
    • 153 Thanks
    Hoogle
    Side question relating to this, But I often read people take out pay day loans and then add to it to make repayments etc.
    Say I was a guarantor for a friend who took out a £300 loan could he then increase the loan without my knowledge and I would still be guarantor even if the principal loan had now increased to say £600 making me responsible for the new increased loan.
    • Owain Moneysaver
    • By Owain Moneysaver 10th Feb 18, 8:22 PM
    • 7,769 Posts
    • 8,465 Thanks
    Owain Moneysaver
    Side question relating to this, But I often read people take out pay day loans and then add to it to make repayments etc.
    Say I was a guarantor for a friend who took out a £300 loan could he then increase the loan without my knowledge and I would still be guarantor even if the principal loan had now increased to say £600 making me responsible for the new increased loan.
    Originally posted by Hoogle
    It would depend on the terms of the guarantee. I think you can assume that any loan company would have the terms written very much in their favour and you would be liable for the full amount of all borrowing including interest and penalties.
    A kind word lasts a minute, a skelped erse is sair for a day.
    • Moneyineptitude
    • By Moneyineptitude 10th Feb 18, 9:11 PM
    • 19,478 Posts
    • 10,579 Thanks
    Moneyineptitude
    Say I was a guarantor for a friend who took out a £300 loan could he then increase the loan without my knowledge
    Originally posted by Hoogle
    I doubt this would be possible without your full knowledge and permission, otherwise the lender would be mis-selling.

    However, if you were to be a guarantor (why?) , you would be wise to ensure that you are guaranteeing only an agreed amount and no more.


    Pay Day Loan companies are morally reprehensible, but they do stay within the letter of the law (nowadays at least).
    • dealer wins
    • By dealer wins 10th Feb 18, 9:20 PM
    • 5,651 Posts
    • 10,628 Thanks
    dealer wins
    Side question relating to this, But I often read people take out pay day loans and then add to it to make repayments etc.
    Say I was a guarantor for a friend who took out a £300 loan could he then increase the loan without my knowledge and I would still be guarantor even if the principal loan had now increased to say £600 making me responsible for the new increased loan.
    Originally posted by Hoogle
    Definitely not!

    But avoid any doubt by never being a guarantor!!
    Choose life
    • bearcat16
    • By bearcat16 11th Feb 18, 12:44 AM
    • 323 Posts
    • 384 Thanks
    bearcat16
    A simple and truthful reason to decline is that sub-prime lending (as this is) damages your credit score. Lenders view it as evidence of poor financial management.

    Rather than be a guarantor, it would be better (for you and your friend) for you to obtain a loan with a mainstream lender at a decent interest rate (~4%) and then lend that money to your friend. They would then make payments to you.

    When you!!!8217;re a guarantor, this is basically what you!!!8217;re doing anyway, only at a ridonkulous interest rate like 49% or whatever.

    However, as others have said, it!!!8217;s best avoided altogether.
    • badmemory
    • By badmemory 11th Feb 18, 2:11 AM
    • 1,347 Posts
    • 1,601 Thanks
    badmemory
    Side question relating to this, But I often read people take out pay day loans and then add to it to make repayments etc.
    Say I was a guarantor for a friend who took out a £300 loan could he then increase the loan without my knowledge and I would still be guarantor even if the principal loan had now increased to say £600 making me responsible for the new increased loan.
    Originally posted by Hoogle
    There are threads on here which say that this has happened. I believe it has even happened with a totally new loan.
    • Fireflyaway
    • By Fireflyaway 11th Feb 18, 9:40 AM
    • 1,541 Posts
    • 1,653 Thanks
    Fireflyaway
    Definitely don't do it. As a guarantor you are liable for the balance if he doesn't pay. The creditors probably won't even chase him that much because its already been established he is a risk. They will come to you! It could ruin your friendship and your finances.
    A family member asked us to be a guarantor on his rent. He had been sneaky around other things in the past so we said no. It wasn't worth the risk. He said all sorts of nasty stuff and we haven't spoken since! If your friend is a true friend he will understand. Helping him better manage his finances would be better than helping him get in more debt. Put it that way?
    • Jackmydad
    • By Jackmydad 11th Feb 18, 12:56 PM
    • 2,031 Posts
    • 4,976 Thanks
    Jackmydad
    For what it's worth, I never look at requests for any sort of "favours" as putting me in the position of being a "bad person" if I refuse.
    I look at the person asking as being a "bad person" for using our friendship as a lever to ask for a favour.
    I don't lend anything out. Neither do I borrow anything.
    Or stand guarantor!
    Remember, no good deed goes unpunished!
    try to get your friend to get help for his money problems as said earlier. That would be a bigger favour for him than anything.
    • DCFC79
    • By DCFC79 11th Feb 18, 1:06 PM
    • 30,926 Posts
    • 19,560 Thanks
    DCFC79
    A simple and truthful reason to decline is that sub-prime lending (as this is) damages your credit score. Lenders view it as evidence of poor financial management.

    Rather than be a guarantor, it would be better (for you and your friend) for you to obtain a loan with a mainstream lender at a decent interest rate (~4%) and then lend that money to your friend. They would then make payments to you.

    When you!!!8217;re a guarantor, this is basically what you!!!8217;re doing anyway, only at a ridonkulous interest rate like 49% or whatever.

    However, as others have said, it!!!8217;s best avoided altogether.
    Originally posted by bearcat16
    You mean credit report is damaged.
    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.
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