I need advice about someone standing guarantee on a loan.

Stone_Fox

Yeah, put like that....!

I'd only just had the 50% thing pointed out to me, hadn't looked at the figures yet. Thank for doing it for me.

And thank you all for the helpful advice, it's people like you that makes asking for help and advice online worthwhile. Thanks for taking time to help me with this.

Btw, I'm looking at doing over 3 years, not 5. His own bank is 12% on £5k (20.4 for £4999 and under) so (assuming he's amenable) we'd be applying to one of the top 10 lenders as per;-

http://www.money.co.uk/loans/5000-loans.htm

so on £5k it'd be around 7% interest. Or for example, Derbyshire at 7.2% over 36 months is £5,555 total repayable with the monthlies being £154.


One more question for you helpful people if I may...

He's Mr.reliable when it comes to things finance so there won't be a black mark against him but I don't believe he's had a credit card / loan / mortgage or anything in *years* so would he meet criteria for some of the better rate lenders? As I understand credit scoring, use of credit is as important as the absence of black marks...

Tixy

Not having a credit history could mean he will struggle to be accepted, or could mean then he is accepted but not at the representative rates but at a higher APR. His own bank should be the one most likely to give him their representative rate as they will be able to see his account conduct etc that other lenders cannot. Although from what you said their representative rate is not as good as some other lenders (unless 12% is an actual quote for him not a representative rate?).

If he has no credit history at all (phone contracts/utility bills maybe?) then he may struggle to get a loan at all.

Stone_Fox

12% is the representative rate from their website, so no. It's not quite the 7-7.2% other banks are advertising.

And as for his credit history I'd have to ask him. I know he's got utility bills for a 4 bedroom house in his name but I don't think he uses actual credit anymore having cut up their credit cards and debenhams cards years back....

That said, at 12% the total repayable is only £374 more than at the 7.2% from the top lender... Still a damn site better than £8,782 repayable on a 50% Amigoloan!

whitewing

Does your father know you have a poor credit history? I'm not being rude to you but if he is not used to borrowing, he may not realise your situation in that respect. I personally don;t think you should ask him or anyone to guarantee your loan or get a loan on your behalf. I have family members who have talked other family members into borrowing money and who have all got into problems because if it. They still don't understand that they should never have asked in the first place; they just think that the 'system' is against them, not that they continually fail to do what they agree to do.

Stone_Fox

Not only does my father know about my poor credit history, I have, admittedly messed him about with money in the past, however that's years ago. I'm a different person, and he knows it, or he wouldn't have agreed to guarantor for me.

And while I agree that borrowing from friends and family has the potential to go wrong and ruin relationships we're not dumb folk who think the systems against them, we're both intelligent professional engineers who understand what we're doing. I had hoped all of this would have come through in my original post. I've been running my own business for a couple of years now and it's been going great up until the unexpected dramas of the last few months, hence his confidence in me.

That said, asking him to Guarantor for me, and asking him to take out a loan feel different to me, hence the reservation...

whitewing

I thought afterwards that I may have come across a bit harshly.

Is there any reason why you can't ask to borrow the money off him himself, if it isn't that big a loan. That seems fairer to me than asking him to guarantee, in the sense if it went wrong then he'd only lose the amount lent not all the associated charges etc/credit rating problems etc.

[Deleted User]

If he is a guarantor his credit file WILL have you on it as a financial associate irrespective of whether a payment is missed or not.

You will both affect each others financial credit standings.

I know this as my Dad was once a guarantor for me on a loan that lasted 8 months before i got rid and got a lower rate loan in my own name. Even now (7 years later) he is still on my credit report bringing me down (his financial standing drastically dropped after his divorce).

If you want to build up your credit rating then get a credit card and pay it off every month (As to not incur interest charges).

See if your dad can get or loan you the money.

You seem set on getting a loan but be aware, you ARE putting him at risk and you are needlessly spending a lot of money on interest.

Tixy

newbieboy wrote: »

Even now (7 years later) he is still on my credit report bringing me down (his financial standing drastically dropped after his divorce).

Are you aware you can file a notice of disassociation with each of the 3 agencies and that he will no longer impact on your file?

[Deleted User]

Tixy wrote: »

Are you aware you can file a notice of disassociation with each of the 3 agencies and that he will no longer impact on your file?

Yes,

I did Experian and Credit Expert a while ago and I have had my Ex removed on my noodle one from a mortgage (she was rubbish with dish), just waiting for confirmation that my dad has been removed from my noodle one!

Thanks though :-)

Good_Goose

Only take the loan if you dont love your father. Sorry to sound harsh but if you need a guarantor you cant afford the loan!!