What does being a guarantor actually involve?

ScienceGrrl

Hi,

I've been asked to be a guarantor by my aunt and uncle for a loan they are taking out for £2000 over 3 years in order to buy a car. They've asked me to do this because I have a "clean" credit history and they are unable to get any more credit (I think they may also have CCJs). I agreed because I wanted to help, but now I'm starting to wonder if I've done the right thing? What does being a guarantor actually involve? Will I have to have a credit search?

I'm a bit worried because I'm only 22 and have just got a mortgage and if they did default paying for their loan then I couldn't afford to pay it! Also, my job ends in September as I'm going back to uni... my uncle said not to tell the loan company that my job isn't permanent, but isn't that fraud if I lie on an application?

Also, I have just tried to get out a personal loan in order to pay for home improvements (we need a new boiler!) and it was refused because the bank thought I would struggle to make repayments. So I'm worried that 1) this means I'm not an appropriate guarantor anyway and 2) that my credit score will get really bad if I have lots of credit searches and a refused loan application and 3) that if i re-apply for a loan (a joint one this time with my partner) then it'll be refused because i'm a guarantor for another loan??

Any advice appreciated.

Chloe

ILW

DO NOT DO IT.
It they default you will be liable for any outstanding debt, This could run into many thousands with charges etc.
To be honest I think they are being very unfair on you telling you to commit fraud by lying on an application.
I would have nothing to do with them, they sound like total users.

Robert_Sterling_3

Your Aunt and Uncle are "bad risks" and cannot get a loan.
They ask you to be a guarantor.
Shame on them.
You appear to be kind hearted and easily led.
So you agree to act as a guarantor.
Now, too late, you ask what is involved in being a guarantor.
What is involved is this.
If your aunt and uncle do not pay off their loan then you have to pay it instead them.
Not just the loan but also any late payment charges etc.

gomer

It will also be YOU who gets bombarded with nuisance phone calls every day harassing you if any payments are missed. Seriously don't do it, not even for family. Let them find someone else because if they fall on hard times and miss a single payment it will be you who gets persued by the loan company.

iolanthe07

My aunt and uncle lost over £14k by standing guarantor for my b-i-l. Please, please don't do it. They should never have asked you.

Pee

Don't do it!!! I don't think it would be fraud not to tell the company your future plans, but with these plans in mind and based on the simple fact that you could not repay their loan for them.

ScienceGrrl

I haven't filled in any application forms for them yet. I've just told them I'll do it - so if I need to back out I can, but I feel terrible about doing that.

They've assured me they'd never miss a payment but I know you can't say that because they've obviously messed up in the past. I guess I'm more concerned about how it affects my ability to have a good credit history/ get my own loan when needed / not end up in a financial mess.

I know what being a guarantor basically involved because my fiance's Dad had been a guarantor for our rented flat when we were students, and he never had any problems. I didn't know I'd be liable for missed payment fees etc. I guess I thought it was a case of "yeah use my name" and that, best case scenario, all I'd have to worry about is some forms.

But because I need to try to get a small loan myself, and the loan application asks if you guarantee any other loans... so if I go ahead, apart from the obvious risks just pointed out to me... will it make it less likely that I can get credit myself?

max2009

At the age of 22 you do not need your credit history ruined by some selfish greedy relatives who think more of money than their niece.Also if you lie all 3 of you can be done for fraud and obtaining money by deception.

Apples2

chloelouise1986 wrote: »

They've assured me they'd never miss a payment but

That's okay then. If they were going to miss payments I'm sure they wold have said.


Seriously, trawl through these forums for people who have been suckered into the repayments.

You'd all feel much better if you simply gave them the £2000 they are looking for. Either way there is a HUGE probability you are going to be at LEAST £2000 down on this.


Their debt becomes your debt so you will be unlikley to get a loan youself unless you are a big earner.

Just let them down gently by stating you cannot get a loan for yourself if you act as guarantor for them, but pretend you would have if you could.

Robert_Sterling_3

Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.
Do not do it. Do not do it. Do not do it. Do not do it.

POSSETTE

as above...Please dont do it sweetie..just tell them that you applied for aloan recently and got refused,so it will only make it worse for you when you require a future loan,if you guarantee thiers.I f they have any feelings about you they will back down.
If they can honestly stand there and say,we wont miss any payments,why did they miss them on all the other loans??
Why cant they ask your parents or have they tried other rellies?

let us know how they react when you tell them no.