You will be required to provide the basic information about your guarantor including:
Age (must be 25 to 75)
By this point, you would have found someone to be your guarantor and asked for their permission beforehand. This is usually someone that you know, trust and have a close relationship with. The most successfully funded guarantors are usually parents, siblings, spouses or close friends. Read our guide on who could be my guarantor.
The guarantor does not need to apply directly, so the main borrower can enter a few basic details on their behalf and then the guarantor will be contacted by the lender for further checks and information.
Most guarantor lenders will lend to guarantors that are tenants, however, they may generally prefer those that are homeowners. By having a mortgage and a place of residence, it means that they would have passed the relevant checks that demonstrate their income and creditworthiness. It also means that they have a permanent address that can be easily contacted in case they need to cover any missed repayments for the borrower.
Whilst homeowner guarantors are preferred, most lenders will also approve those that are tenants, living with friends or family.
A credit check will regularly be carried out by guarantor lenders prior to approving and funding a loan.
Although the credit score of the main borrower is expected to be average, the credit rating of the guarantor is far more important. The lender considers that if the guarantor who is backing up the loan has a very strong credit rating and a stable income, it gives them a higher probability of being able to recuperate their funds if the main borrower cannot pay.
The credit check will not affect the credit score of the guarantor since it is only a ‘soft credit check’ that is carried out and will disappear shortly after.
The guarantor loan company will usually have a phone call with both the main borrower and the guarantor to explain all the terms of the agreement.
This confirms the identity of the parties involved and ensures that they understand the full responsibilities. Above all, the guarantor has to be aware that they will be required to cover costs if the main borrower does not repay on time.