Guarantor Loans

gunsandbanjos

Just read this on the BBC news site http://www.bbc.co.uk/news/business-33555764

Apparently most guarantors don't realise they will be liable if the person taking out the loan fails to pay.

What do they think being a guarantor means then? That they are guaranteeing the applicant is a lovely person?

God I despair.

Gaz83

gunsandbanjos wrote: »

Just read this on the BBC news site http://www.bbc.co.uk/news/business-33555764

Apparently most guarantors don't realise they will be liable if the person taking out the loan fails to pay.

What do they think being a guarantor means then? That they are guaranteeing the applicant is a lovely person?

God I despair.

Pretty much, yes.

A lot of guarantors seem to think they are doing no more than giving a reference.

ilikewatch

2 reasons:

a) People don't read t&c's and rely on the headline advertising for the product - If you got all your info about Amigo loans from one of their TV adverts you would assume you were giving a reference, not guaranteeing a loan.
b) People rely on information they get from the friend/family member who's twisting their arm to guarantee the loan - someone who has an obvious motivation to make the arrangement seem as attractive as possible.

jonesMUFCforever

It used to be that a bank would not accept a guarantor for a loan without that person having independent legal advice from a solicitor.

IT IS HIGH TIME THIS BECAME MANDOTARY for all guarantors.

csgohan4

Another reason why money and friends/relatives don't mix. Even if their desperate no is the answer, if they can't get their finances in order now they are unlikely to in the future either to pay you back.

27col

gunsandbanjos wrote: »

Just read this on the BBC news site http://www.bbc.co.uk/news/business-33555764

Apparently most guarantors don't realise they will be liable if the person taking out the loan fails to pay.

What do they think being a guarantor means then? That they are guaranteeing the applicant is a lovely person?

God I despair.

Yes! I suspect that that is exactly what they think.
They never stop to think that there is a reason why the borrower needs a guarantor.
The reason is that they have a track record of defaulting on loans..
If the potential borrower were to put themselves in the position of being a potential lender. They would also never lend to someone whose credit record was as bad as their own. But, of course, they would never look that far ahead. All they want is some money to appease some perceived "need", and they want it now.

gunsandbanjos

It's actually terrifying when you think how many people must sign up to these companies with NO idea what they are actually signing.

I fully agree with the above about independent legal advice being mandatory.

Having never been in the position of needing or being a guarantor I can only make assumptions but surely the loan company explain that if the applicant defaults then they are liable?

Is that naive of me?

Pixie5740

I think it's mostly done online these days. Amigo, the very well loan guarantor loan company has this webpage that the guarantor has to go to in order to complete the loan application.

This is a link to the Guarantor page on the Amigo Loan website which guarantors have to go to in order to complete the application. If people can't glean that they have a responsibility to repay the loan when the person being guaranteed stops making the repayments then there's no hope for them.

Puddylove

Having read that Amigo guarantor link and information, it couldn't be any clearer.
At some point people have to take a responsibility for their actions; and to research what they are signing.

P x

gunsandbanjos

Puddylove wrote: »

Having read that Amigo guarantor link and information, it couldn't be any clearer.
At some point people have to take a responsibility for their actions; and to research what they are signing.

P x

I agree, it spells it out in the first sentence that you are liable.

We need to stop making excuses for people and start having them take responsibility for themselves.

nyermen

Most pay the money to the guarantor as well - so they have to give bank details - does that not then ring alarm bells?!

Peter