General query about best way to borrow

lynz68

While I don't advocate anyone being a guarantor for anybody what you have to keep in mind before you proceed is this.

If for some reason your friend doesn't/can't pay can you afford to make the payments which is what is expected of a guarantor if not then don't proceed. I appreciate you trust this person completely but none of us know what is around the corner.

You cannot simply add your name to a loan application and not have any repercusions on you should the proverbial hit the fan.

BillJones

goolip wrote: »

I dont really want to get a loan purely because when I was married, I had all the loans etc in my name and when my husband disappeared I was left with the debt

As others have said, having "your name on the loan" means that exactly the same can happen again. You are every bit as liable for the debt as your friend is, if you take this route, and you have the added downside that guarantor loans (i.e. ones that you can add your name to) tend to be far more expensive than "normal" loans.

This is why people are urging caution. The extra name on the loan is someone guaranteeing to take it on, in full, if and when the first person stops making payments in full and on time.

dealer_wins

goolip wrote: »

I dont really want to get a loan purely because when I was married, I had all the loans etc in my name and when my husband disappeared I was left with the debt even though it was for things we had together such as the car. I know my friend wouldnt do this but I wouldnt get a loan for anyone, I dont even want one myself - my mortgage is quite enough.

Thank you.


Lizzie

Lizzie whether you allow yourself to be the second name on your friends loan, be a guarantor for your friend, or take out a loan yourself and give the £5000 to your friend its the same thing.

With all 3 scenarios if your friend stops paying YOU will be chased for the debt.

And assuming your credit rating is better than your friend's, the option of you borrowing the £5000 in your sole name and giving it to your friend will be the cheapest by far, as you will be able to get credit at 5-15%. A guarantor loan will be 50% and a bad credit loan 300%+

But my advise would be not to get involved unless you are willing to GIFT £5000 to your friend and genuinely not expect anything back. Then if they repay you great, if not well you helped out a good friend and your friendship was on such a high level you are OK with that.

Have a read of this thread to see many tales of families and "friends" being ripped apart due to money not being repaid!!

https://forums.moneysavingexpert.com/discussion/76953