Guarantor Loan Explained

guarantor loan is a type of lending product that requires a guarantor to co-sign the agreement. The guarantor is someone who agrees to repay the loan on behalf of the borrower, should they fail to meet the agreed repayments.

Creditplus Definition of Guarantor Loan

The Creditplus Guarantor Loan is a financial product consisting of a secured car loan where a third party (friend, family member or work colleague) agrees to guarantee the repayment of the car finance agreement in case the borrower fails to meet the monthly repayments. 

Wikipedia Definition of Guarantor Loan

"guarantor loan is a type of loan that requires a guarantor to co-sign the credit agreement. A guarantor is a person who agrees to repay the borrower’s debt should the borrower default on agreed repayments. The guarantor is often a family member or trusted friend who has a better credit history than the person taking out the loan and the arrangement is, therefore, viewed as less risky by the lender. A guarantor loan can, consequently, enable someone to borrow either more money, or the same amount at a lower rate of interest, than they would otherwise be able to secure through a more traditional type of loan..."

Source: Guarantor Loan Wikipedia

Related Terms

Secured Loan

Got a question for us?

If you require further assistance, our team of Customer Advisors are here to help. We're open six days a week - you can view our opening hours here - and we're more than happy to answer your questions.