What is a guarantor loan?

A guarantor loan is a type of unsecured loan where someone you trust – usually a friend or family member – agrees to cover your repayments if you can't. It’s an option for people, including young adults, with no credit history or a poor credit score who might struggle to get a loan otherwise.

The guarantor acts as a safety net for the lender, which can boost your chances of being approved. But it’s a serious commitment. If you miss repayments, your guarantor becomes legally responsible for the debt, so trust and clear communication are key.

These loans can come with higher interest rates than standard loans, so it’s worth comparing deals carefully. They're not for everyone, but for some, they can be a helpful way to borrow money - and a stepping stone towards building a better credit score.

Are you eligible for a guarantor loan?

If you're thinking about applying for a guarantor loan, you might be wondering what lenders usually look for during the application process. While exact requirements vary between providers, here’s what you may need to qualify:

  • Age and residency: You must be at least 18. Your guarantor however may need to be over 21 and under 75 years old.

  • Banking: You must have a UK bank account.

  • Income: Lenders usually need to see that you have a regular income or savings. The same goes for the guarantor.

  • Monthly expenses: They’ll want to ensure you can afford the loan repayments.

  • Credit history: You may not need good credit, but your guarantor will need to have a decent credit history.

Something else to bear in mind is that typically there should be no financial ties between borrower and guarantor. That means if you share a bank account – or they are your spouse, civil partner or business partner – they will likely be ruled out as a guarantor.

Just keep in mind, late repayments can lead to financial headaches and marks on both the borrower and guarantor’s credit reports, so always be sure you can comfortably keep up with repayments.

How much can I borrow with a guarantor loan?

How much you can borrow largely depends on your income, if it’s regular and stable, and how affordable the repayments will be for you.

Lenders will also look at a few other factors when deciding what to offer. At the very least, this is likely to include your monthly outgoings and the credit history of you and your guarantor.

As always, it’s often considered smart to only borrow what you need - and always make sure you can manage the repayments comfortably.

Loan guides

Answering your questions about guarantor loans

Page updated on 9th October 2025, Reviewed by Richard Groom