"Payday" Loan Guarantor

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  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    If you can afford to lose the £3500 then yes lend it to him. How confident are you he will be able to repay in 2 months ?

    You said yourself your in the process of applying for a mortgage, the £3500 would be really useful to you.

    Not something I would do myself, I can just see it going wrong.

    Mixing money and family could bea recipe for disaster.
  • Clive_Woody
    Clive_Woody Posts: 5,855 Forumite
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    Tell them a very clear non-negotiable "no" - make it clear that this also applies in the future too. Do not enter into discussion or say maybe some other time. Regardless of other applications this is never a good idea.
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • yksi
    yksi Posts: 1,024 Forumite
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    It might be useful to understand the reason we're yelling no - it's the same reason that your friend can't get traditional credit, can't even get a subprime card, can't even get a payday loan on their own. All of those lenders are SO SURE that the money will never be repaid that they have said no to your friend, not under any circumstances, not even at 500% interest (yes, they exist - think about that - nobody will even offer him a 500% interest loan).

    Do you know more about financial risk than companies which spend millions understanding credit behaviour? Nope. Neither do we. Trust those other companies which said no - your friend is a terrible financial risk and you're going to lose your money.
  • poppasmurf_bewdley
    poppasmurf_bewdley Posts: 5,909 Forumite
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    edited 13 January 2020 at 10:58AM
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    The reason your family member has gone to a 'guarantor required' loan company is because normal loan companies won't touch him with a barge pole. Why? Because he doesn't pay his debts.

    Even the 'guarantor required' company know he doesn't pay his debts. That's why a guarantor is needed.

    The mug at the end of the line - to pay up when everything else has gone t*ts up, so to speak.
    "There are not enough superlatives in the English language to describe a 'Princess Coronation' locomotive in full cry. We shall never see their like again". O S Nock
  • stripeyfox
    stripeyfox Posts: 474 Forumite
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    The way they push this is to make it feel like you're just "vouching" for your friend, but the reality is to all intents and purposes they are lending to you based on YOUR credit profile. If he doesn't pay back (which he probably won't) you WILL have to pay it back, and lose a friend in the process.

    It has to be a "No"
  • Paully28
    Paully28 Posts: 289 Forumite
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    I would do it, nothing says I love you more than setting fire to £3500 used bank notes.
  • Blackbeard_of_Perranporth
    Blackbeard_of_Perranporth Posts: 7,605 Forumite
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    Take the family member to the pub, blow £50 and the them to go forth and ….
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    Thanks everyone! Definitely the confirmation, if any, that was needed :)

    Slightly different note, but I'm 'advising' someone else now in the office...

    If ordered, would you say this was a fairly accurate, general order of preference when looking at regular loan options?
    1. your bank
    2. price comparison, best rate/option etc.
    3. secured loans
    4. payday loans
    5. guarantor loans

    I think those are main ones, certainly that I know off. It feels like I'm speaking in a different language at the moment to my colleague!
  • MallyGirl
    MallyGirl Posts: 6,627 Senior Ambassador
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    I would put secured loans further down the list - risking the roof over your head
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  • DCFC79
    DCFC79 Posts: 40,598 Forumite
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    slipd wrote: »
    Thanks everyone! Definitely the confirmation, if any, that was needed :)

    Slightly different note, but I'm 'advising' someone else now in the office...

    If ordered, would you say this was a fairly accurate, general order of preference when looking at regular loan options?
    1. your bank
    2. price comparison, best rate/option etc.
    3. secured loans
    4. payday loans
    5. guarantor loans

    I think those are main ones, certainly that I know off. It feels like I'm speaking in a different language at the moment to my colleague!


    Yes I would agree with that except I wouldnt touch the last 3 with a bargepole.
    If it meant having to eat cheap meals eg beans on toast then I would go to that length.
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