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How to find a guarantor for your finance & questions to ask them

Car ownership is no longer a luxury; it's a necessity. However, many people find it challenging to secure a loan due to various reasons such as low credit scores or a history of debt.


Car ownership is no longer a luxury; it’s a necessity. However, many people find it challenging to secure a loan due to various reasons such as low credit scores or a history of debt. Guarantor car finance offers a solution to this predicament. In this article, we’ll delve deep into how to find a guarantor for your finances and crucial questions to ask them.

What is a guarantor?

A guarantor can be best described as a financial safeguard, someone who offers to take on the responsibility of your loan repayments in the event that you’re unable to meet them. They are the backup plan, the person the lender can turn to if you default on your commitments. It’s an age-old concept rooted in trust and financial stability. The guarantor doesn’t have any claim on the asset, be it a car or a house, but they are bound by a promise to the lending institution that they will step in if the primary borrower cannot fulfil the payment requirements.

Why might you need a guarantor?

The need for a guarantor arises typically when the lending institution perceives a high level of risk in the loan application. This risk perception could be due to various factors:

Credit history: A poor credit score or a limited credit history can make lenders wary. 

Insufficient income: If your income doesn’t meet the threshold set by the lender, they might seek additional assurance in the form of a guarantor.

Age: Young borrowers, especially those without a proven financial track record, often require a guarantor.

Past financial mistakes: Defaults, late payments, or declared bankruptcies in the past can necessitate a guarantor for future loans.

Traits of an ideal guarantor

Financial stability

Guarantor eligibility starts with their financial stability. A guarantor should have a steady income, minimal debts, and a decent savings history. The lender needs to be sure that if things don’t go as planned, the guarantor has the financial capacity to take over the loan repayments.


This isn’t just about the borrower’s trust in the guarantor but also the lender’s trust. The guarantor must be seen as someone who will honour their commitment and step in when required.

Good credit score

A good credit score is an obvious criterion. This three-digit figure summarises their financial behaviour and indicates their reliability in the eyes of financial institutions.

Long-term relationship with the borrower

A long-standing relationship suggests a deeper level of trust and understanding between both parties. It’s also a testament to the guarantor’s faith in the borrower’s intentions and capabilities.

Understanding of their role

Guarantors must fully comprehend the responsibilities they’re taking on, the potential financial implications, and the repercussions of the borrower defaulting.

Willingness to help

A genuine desire to assist is crucial. They’re not just signing a paper; they’re potentially committing their finances.

10 ways to find potential guarantors

1. Self-assessment before searching

Before reaching out to potential guarantors, you must have a clear understanding of your financial standing. Know your credit score, and the reasons you require a guarantor, and be prepared to explain your financial plans.

2. Start close to home with immediate family and relatives

They’ve known you longest, and they’re often the first ones willing to help. Sharing your needs and concerns with them might lead to them stepping in as guarantors or suggesting someone else who can.

3. Broaden your search to friends and acquaintances

Some friendships are as strong as family bonds. A friend who understands your situation and trusts you might be willing to be a guarantor.

4. Consider your professional network

This is a more formal route, but colleagues or superiors who’ve known you for a long time might consider your request, especially if the finance you’re seeking will enhance your professional standing.

5. Consult with financial advisors or brokers

These professionals might know potential guarantors or guide you on how to find one. Their advice can also help you understand what lenders are looking for.

6. Look into reputable online platforms connecting borrowers with guarantors

Today, there are platforms that connect borrowers with potential guarantors. However, do your due diligence before using such platforms.

7. Prepare a proposal to share with potential guarantors

This proposal should detail why you need the loan, how you plan to repay it, and why you require a guarantor. It’s about making a strong case for yourself.

8. Initiate personal conversations with potential guarantors

It’s more personal and persuasive than emails or messages. Meeting face-to-face also allows them to ask questions and get immediate answers.

9. Be open to questions and concerns

Expect potential guarantors to have questions and possibly even reservations. Address these openly and honestly.

10. Offer reassurance about your financial responsibility

Share your financial plans, past successes, or lessons learned from past mistakes. It’s about building confidence in your intentions and abilities.

Approaching and speaking to potential guarantors

When approaching potential guarantors, your approach and communication can make or break their decision. Here’s a guideline on how best to proceed:

1. Start with why

This is the heart of your request. Begin by explaining why you’re seeking finance and the circumstances that led you to need a guarantor. Whether it’s to achieve a particular goal or to address a pressing financial need, sharing the context is essential. This gives potential guarantors the background and understanding to evaluate your request comprehensively.

2. Be transparent

Transparency helps build trust. Share your financial history, both the highs and lows. If you’ve faced setbacks, be candid about them and explain the lessons learned. Your potential guarantor should get the full picture, warts and all.

3. Share your plan 

Discuss your strategy for ensuring that the loan will be repaid. Whether it’s through monthly savings, a new source of income, or budgeting, share the steps you intend to take. This demonstrates responsibility and forward thinking.

4. Discuss the guarantor’s role

Make sure the potential guarantor understands what they’re signing up for. Detail the responsibilities, the potential financial implications, and the duration of their commitment. It’s crucial they know what’s expected of them.

Questions to ask a potential guarantor

When considering someone as your guarantor, it’s not just about them vetting you. You need to ensure they’re the right fit:

How familiar are you with the role of a guarantor? 

It’s crucial they understand what they’re stepping into. Misunderstandings can strain relationships and finances.

Are you comfortable with the potential financial risks involved? 

They need to be aware of the possible financial implications if you default.

Have you ever been a guarantor before? If so, what was your experience? 

Past experiences can give insights into their comfort level and the precautions they might want to take.

How confident are you in your current financial situation? 

Their confidence in their own financial stability is a key indicator of their capability to act as a guarantor.

Do you foresee any changes in your financial situation in the near future? 

A potential job loss or large upcoming expenses can affect their ability to act on their guarantee.

Are you aware of the terms and conditions of the finance agreement? 

Ensuring they’re fully informed about the agreement will minimise future misunderstandings.

Finalising your guarantor agreement

Formal documentation and agreements

While trust is essential, so is legal documentation. Make sure all agreements with your guarantor are documented. This protects both parties.

Legal considerations

Understand the legal implications of having a guarantor. They should be aware of their rights and responsibilities. It might be advisable to consult a solicitor to ensure all legal bases are covered.

Communication between borrower, guarantor, and financing entity

Maintain open lines of communication between all parties. Regular updates on loan repayments, any challenges faced, and changes in the finance agreement are crucial. Transparency reduces potential strains and misunderstandings.

It’s important to be on the same page as your guarantor

Securing a guarantor for your finances is about more than just meeting a lender’s requirements. It’s about establishing a relationship built on trust, understanding, and mutual respect. This bond, often involving close friends or family, requires careful nurturing. Transparent communication, honoring your commitments, and keeping your guarantor informed is paramount.

When both parties are aligned, the journey, though possibly challenging, becomes smoother and more manageable. Remember, your guarantor is your financial safety net and advocate – treat the relationship with the importance it deserves.

Frequently asked questions

How do I determine if someone is a good fit as a guarantor for my car loan?  

Identifying a suitable guarantor involves considering several factors. First, they should have a stable financial situation with a good credit score. Their understanding and comfort with the role of a guarantor are vital. Additionally, a long-standing, trustworthy relationship with you can make the process smoother. Prior experiences as a guarantor, willingness to assist, and confidence in their financial future are also indicators of a good fit.

If I’m unable to make a car payment, what happens to the guarantor?  

If you miss a car payment, the lender will first approach you for the owed amount. If you continue to default or are unable to settle the amount, the guarantor will then be approached to cover the payment on your behalf. The guarantor’s role is to ensure that the lender receives their due payment, thus preventing potential legal actions or additional fees. This is why it’s vital for guarantors to be fully aware of their responsibilities before agreeing.

Are there legal ramifications for my guarantor if I default on my car finance?  

Yes, there can be legal ramifications. If the guarantor fails to make the necessary payments after you default, the lender can take legal action against both the borrower and the guarantor. This could affect the guarantor’s credit score, and financial stability, and even result in asset repossession depending on the terms of the agreement. Before agreeing, guarantors should be well-informed of all potential outcomes.

Can I change my guarantor midway through my car finance agreement?  

Changing a guarantor during a car finance agreement depends on the lender’s terms and conditions. While some lenders might allow for a change, often, they will require a substantial reason for doing so. There will likely be a process to assess the new guarantor’s eligibility, ensuring they meet the necessary criteria. It’s essential to consult with the finance provider directly for specifics.

Will being a guarantor for my car finance impact someone’s credit score?  

Acting as a guarantor won’t inherently affect someone’s credit score. However, if the borrower defaults and the guarantor also fails to meet the payment obligations, then this default can be recorded on the guarantor’s credit file, potentially affecting their score adversely. It’s crucial for guarantors to be proactive and aware of the borrower’s financial standing to prevent such scenarios.

How can a potential guarantor get clarity on their specific duties and responsibilities?  

Potential guarantors can get clarity by discussing the agreement terms directly with the lender. They might also consider seeking advice from financial professionals or solicitors to ensure they fully understand the implications and responsibilities. Reading the fine print and asking for any ambiguous clauses to be explained is essential.

How can I build trust with my guarantor regarding the safety of this car finance agreement?  

Building trust involves transparent communication about your financial situation, your plans for repayment, and any potential risks. Regular updates on your financial standing, proactive sharing of repayment histories, and ensuring you both have a thorough understanding of the agreement can foster trust. Remember, a guarantor relationship is built on mutual respect and understanding; honoring your commitments goes a long way in reinforcing trust.

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