garentor. was i right to refuse?

atrixblue.-MFR-.

i'm feeling pretty guilty as today, my BIL and his partner put me on the spot a bit by asking me to go garentor on a personal loan due to their credit score.

the loan was for a car and to pay off some other loose low end debts and manage their money better.

i refused based on the fact that, in the terms and conditions it stated that the garentor would be responsable for the entire loan if debtor defaulted, or made bankrupt or IVA and the sum payable in full with administration fee's and interest of the duration of non payment.

i also refuse based on the car they were aiming to get, MG TF 1999 would be a money pit and his record with cars is not very good.

and also their financial stability, BIL is having money problems and struggling to keep affloat, he and his partner are now merging their cash together to make things easier and more managable, but at this present time they have no home to budget in factors such as electricity water gas etc, so i find it hard to bare the fact they are now going to be OK financially.

i felt horrible as i knew the car he has now is not going to last another couple of weeks and is ready for the end of life certificate from the scrap yard and the car is source of his income, but i also felt angry at the same time for being out on the spot, as i had to make a decision there and then as the documents had to be signed in order for the cash to be released.

it was £1500 loan, over 12 months, total payable with £150 admin fee deducted from loan amount £1982.32p.

david39

You were right to refuse it unless you were prepared to write the money off as a gift.

From your description, your BIL is not reliable with cars or money, so the chances are that there would be a default that would involve you repaying a large proportion of the loan

You only need to search through these boards to find dozens of distress stories of people being left holding a debt when a relative has defaulted on a loan which they guaranteed.

Your original judgement and decision are correct.

opinions4u

Don't do it.

Your judgement is spot on.

soolin

I agree your judgement is spot on.

I've seen too many people sign these things out of guilt or misplaced loyalty and it comes back to bite them later.

aliasojo

Accept that your feelings of guilt are simply down to being human and caring.

It's clear your BIL still wasn't being sensible so why on earth would any sane person choose to underwrite his continuing bad choices?

You did the right thing. Now forget about it.

chesky369

Your brother in law knew exactly what he was doing when he asked you to act as guarantor and he thought you would feel precisely as you did, awkward and embarrassed. Fortunately, your good sense overcame those very 'English' feelings and probably saved you a good deal of misery in the future.

Tell him to go to his local CAB for help managing his money.

Hazzinho

Definitely the right move, as others have said lending to friends and family is only something you should do if you don't mind never getting the money back. They might give the guilt trip but they're in it through their own mistakes, I'd never ask friend and family for money.

DCFC79

Yes you did the right thing in saying no, if hes having money problems then how could he afford to pay the loan ?

tell_it_how_it_is

In all likelihood you've saved yourself almost £2k.

Therefore, replace guilt trip with huge sigh of relief and give yourself a huge pat on the back.

Apples2

You are more than two grand better off now than you would have been.
The lenders KNOW they won't bother repaying.

They sound financially naive, it's a good job you arent

In a while your guilt at what happened will turn to anger at how they tried to abuse you.

Well done for making the right choice.

redped

I can't add anything over and above what everyone else has said - you did the right thing by saying no.