"Payday" Loan Guarantor

[Deleted User]

Hey guys,

A mature (45) family member with a shocking financial/credit history has approached me to act as guarantor for a 2 month, payday-style loan - I'm not sure of the brand? They're pretty much all the same right...

The specifics are hazy, but the amount is £3500. From what I understand they are unable to acquire credit in the usual manor.

Their financial reputation aside, I'm in the throws of my own 1st-time mortgage application and I don't want the proverbial waters muddied by any, out my own hands, blips. My credit history is exemplary :cool:

I think I know the answer/s already but I just wanted to check first. I'd be a fool to say yes right?

Thanks.

Willing2Learn

We get threads all the time, where someone has acted as a guarantor, only for their friend being unable to make the payments, and then it all goes pear-shaped for the guarantor. Ruins relationships with friends/family too.

sourcrates

slipd wrote: »

hey guys,

a mature (45) family member with a shocking financial/credit history has approached me to act as guarantor for a 2 month, payday-style loan -

the specifics are hazy, but the amount is £3500. From what i understand they are unable to aquire credit in the usual manner.

I think i know the answer/s already but i just wanted to check first. I'd be a fool to say yes right?
.

Right !!!!!!!!!

Theres really no more to say, this forum is full of posts where family members have stood as guarentor, then the debtor has forgone their obligations, and the guarentor becomes liable, its a fools errand, it really is.

Walk away as fast as you can.

Money_maker

A payday loan history would really mess up your mortgage application. Pretty unfair for a more senior member of your family to ask you to do this. Just decline.

[Deleted User]

Thanks people, and sorry to have repeated anything but I feel happier stating my own, actually story - as opposed to jumping in with someone else's.

So, like I thought, it's a fairly resounding 'NO.' Thought as much, but thanks for the response.

LifesAGamble

Being a guarantor is basically lending them your own money. Unless you would be happy doing that (And with a very real chance of it not being repaid and the relationship breaking down too), then never be a guarantor.

If you want to help and can afford it, gift them the money. That way when its not repaid there is no ill feeling.

MovingForwards

As you are in the process of a mortgage application you do not want any additional credit applications being undertaken!

If you have a spare £3.5k on top of your deposit / fees and can afford not to get it back, lend it to your mate.

Do not ever do a guarantor loan!

D_M_E

£3500 repayable in 2 months and payday style loan?

High amount for payday loan and short repayment period would be a definate NO, especially as you want a mortgage in the very near future.

Jonathan_Kelvin

slipd wrote: »

Hey guys,

A mature (45) family member with a shocking financial/credit history has approached me to act as guarantor for a 2 month, payday-style loan - I'm not sure of the brand? They're pretty much all the same right...
The specifics are hazy, but the amount is £3500. From what I understand they are unable to acquire credit in the usual manor.
Their financial reputation aside, I'm in the throws of my own 1st-time mortgage application and I don't want the proverbial waters muddied by any, out my own hands, blips. My credit history is exemplary :cool:
I think I know the answer/s already but I just wanted to check first. I'd be a fool to say yes right?
Thanks.

Are you OK to make all payments, charges for arrears etc when your family member defaults, as they are very likely to do?

You do understand, I hope, that the loan company does not believe that your relative will pay, so they have you to pay when that happens.

Sea_Shell

If he doesn't have £3500 now, what makes you think he'll suddenly have £3500 plus interest in 2 months time??

JayRitchie

Jsacker wrote: »

Though I will point out one tiny thing... This forum is unlikely to be full of posts where family members have experienced zero issues and the loan has been repaid in full, and on time because it isn't really postworthy And that scenario (repayment with no issues) can, and does, happen in the real world.

So it shouldn't be automatically ruled out based on what *could* happen, but it should play a big part in the final decision.

Depends on the interest rates. If the debt incurs 50% a year its a terrible risk to take. If you do need to support a family member its better to use cash, or borrow money at a more reasonable rate and sign a contract with them to repay you directly.