Asked to be a guarantor - how to say no

Kr94_2

Hi all!
First post and thread.
The short version is that a friend of mine has run into a money issue, and has asked me to be a guarantor for a payday loan to the value of £1250.
Equating to £77 a month for 24 months including interest.
I initially agreed to it to help out, but haven't gone through the application etc
Although he swears he will pay this and pay it off early (no early repayment fee)
I have a feeling that it won't be as simple as that, and am very uncomfortable going ahead with it.

It's not that I don't want to help him in this pinch, or that the £77 would be too much of a loss,
I simply do not feel comfortable with it.
What can I do in this situation whereas not to break friends but also not put myself into a potentially monthly uncomfortable situation?
Any and all advice is welcomed!
Thanks!

martinthebandit

Just say sorry I am not comfortable doing that

If they are a friend they will understand and accept.

DCFC79

Just say your not comfortable with it.

Offer to look at his finances and look what can be cut back on.

Owain_Moneysaver

It's not £77 a month, if the friend defaults on the loan repayments the full amount outstanding probably becomes due immediately, plus late payment and debt collection fees.

If you lent your friend the £1250 at least that would be all you would lose if he didn't pay you back.

Hoogle

If he was to default you will get a demand for full balance and interest and fees so if he defaulted on 2nd month you would be liable for probably over £2500 possibly even more.

You can say that you cant have a pay day loan on your credit file it is not really a solid excuse if you can't just say no then you could use it I guess.

[Deleted User]

Find out why they have money worries? See if you can help them out in other ways beside hard cash.

If your credit is in good condition, why don't you take out a loan on more favourable interest and terms for you?

Even my Mum knew never to be a guarantor unless it was helping out her hard up sister in property/rent paying alone. Mum helped until she retired and had to surrender and now the idea of helping is every so often my parents will do a big shop for mum's sister.

Kr94_2

Thank you for the advice all!
Had no idea it could become repayable in full - that I absolutely cannot afford.
If anything absolutely confirmed I'm not doing it now.
And now that's settled, off to the pub! :beer:

Money_maker

Deleted%20User wrote: »

If your credit is in good condition, why don't you take out a loan on more favourable interest and terms for you?

Just do not do this either, it is as stupid an idea as being a guarantor. Either give them the cash and accept it is gone or say that sorry, you cannot help. Never take out a loan for someone else - ever.

Cakeguts

Never ever get involved with lending money to a friend or helping them to borrow money if you want to remain friends. If they are a real friend they will understand why you don't want to do this.

DCFC79

Cakeguts wrote: »

Never ever get involved with lending money to a friend or helping them to borrow money if you want to remain friends. If they are a real friend they will understand why you don't want to do this.

If going to lend money either do it as a gift or be prepared to lose it.

poppasmurf_bewdley

If this friend has got this 'money issue' and is having to go to a pay day loan company, then it means his credit is shot already, which is why no main stream loan company will offer him anything.

If his credit is shot, that means he'd not been paying his bills, which means he won't pay this one either.

And if he takes exception to you not being a guarantor for him, then he's not much of a friend anyway and you're better off without him.