What Happens If A Guarantor Is Declined???

John_G_Jones

Ryanw96 wrote: »

Thank you all for the replies.

I thoroughly understand what it entails, the person who has asked me is family, so it's safe to say I know where they live!!!

Brilliant. Now, when they default, and you become liable for the entire debt at the exorbitant rates, what will you do with that information?

zippygeorgeandben

Please, please, please just STOP what you are doing and listen to the advice on here. Do not let yourself be guilt ridden into this. If and when they stop paying, what would your parents think?
and... all this 'I know where they live, I have text messages promising to pay me' etc mean absolutely nothing.

MEM62

Ryanw96 wrote: »

Thank you all for the replies.

You are welcome. Shame that it looks like you will ignore the advice. Oh well..... It is your money to give away.

Ryanw96 wrote: »

I thoroughly understand what it entails, the person who has asked me is family, so it's safe to say I know where they live!!!

Do you? In many cases it entails paying up when, not if, your friend/relative defaults. If they cannot meet the loan repayments they cannot meet the loan repayments. knowing where they live makes no difference and offers absolutely no assurance.

Ryanw96 wrote: »

I was curious as I read that being a guarantor doesn't show on your credit file UNLESS the loanee defaults or doesn't pay, then it appears on my file as a loan against me.

I am not sure that this is the case. The general arrangement tends to be that the guarantor is actually the borrower.

Ryanw96 wrote: »

I have loans etc.

Then you probably do not want to be paying for your relatives loan as well when they default.

You relative is viewed as high risk by mainstream lenders. You seem reluctant to take that hint and seem convinced that you know better. (Have you not read any of the posts on here from guarantors lamenting the fact that they being stitched up and looking for a way out of their guarantors' responsibility?)

As I said above, it is your money to give away so go ahead.

Paul_DNAP

Ryanw96 wrote: »

I thoroughly understand what it entails, the person who has asked me is family, so it's safe to say I know where they live!!!

Knowing where THEY live is not of any use to you, as when it all goes wrong it will be YOUR house they will send the debt collection letters to, not theirs.


And you won't even be able to take private action against them to recover your losses, as you will have an agreement in writing that you will pick up all the pieces of their financial disaster willingly.

redux

Even if it's family, come back to reread the advice here.

There's no point being liable for £5000 or so if it goes wrong.

In your mind gift the money, and maybe hope for it back in due course.

If you aren't willing or can't afford to do that, that's a true test of the balance of your commitment and opinion of the risk. But if you do it, at least your potential loss is restricted to the loan amount, not also with interest piled on top, and possible credit history damage.

robber2

A current example of an all to common problem;



https://forums.moneysavingexpert.com/discussion/5970151/another-amigo-loans-thread




Rob

Mobeer

Amigo loans have their own flow chart:
https://www.amigoloans.co.uk/assets/downloads/Amigo_Loans_Why_Be_A_Guarantor.jpg

I can honestly say I can see no viable set of choices by which it would ever make sense to be a guarantor.

Particularly when the first answer is often No.