Guarantor

jenner_2

My son has asked me to be a guarantor, if I agree, will this affect any future lending for me?

crazyguy

If he pays it on time every time and does not default in any way then your ok, but if he does default the debt is then recalled from yourself direct !

paddyrg

If you act as a guarantor, you may as well borrow the money yourself, then lend it to your son. It will be exactly the same result in terms of whose credit record gets trashed, etc., but guarantor loans have more bad surprises and higher charges/interest rates.

Tixy

Guarantor for what? a loan?

I would be very cautious about this. If you do this and he defaults it will affect your credit rating and you will become responsible for the debt.
If he is unable to get credit himself then do you know why?
You would probably be better getting a loan in your name and lending that to him. Then you make the payments to the loan and he pays you. You'll then know for certain that it is being repaid. And its likely that you could get a loan much cheaper than his guaranteed loan would be.

Tubbss

Think long and hard before agreeing to this. These forums have several stories where family members / friends have signed as guarantors and regretted it when the credit companies came knocking / writing etc because the laon had not been paid.
If your son cant get credit in his name think why? - has he defaulted / missed payments etc in the past on other agreements? The credit comany know that he is a bad risk, otherwise they wouldnt need a guarantor.

RichGold

What they said.

If you're willing to risk your neck by being guarantor for him then simply forget that and do it the smart way. Borrow the money for him yourself at a far more preferable interest rate and have him pay you. You'll both be better off in the long run, You'll have control of the loan and he'll be able to pay less on it due to it (hopefully) being a reasonable rate of interst.

Tangible

Unless you're in the legal profession or familiar with the guarantee document, a bank must recommend you to take legal advice, and if you try reading the clauses and small print you'll see why. They contain many clauses and conditions you wouldn't imagine and you'll probably find that once signed they'll be reluctant to let go of it, irrespective of the loan being repaid.

Any alternative is better than signing a guarantee.

LovelyLeeds

Tubbss wrote: »

If your son cant get credit in his name think why? - has he defaulted / missed payments etc in the past on other agreements? The credit comany know that he is a bad risk, otherwise they wouldnt need a guarantor.

Excellent point. You will be the first port of default once he runs into difficulties, (if he does).