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Can You Stop Being Someone’s Guarantor?


When you agree to being someone’s guarantor in a formal loan agreement, it is very difficult and unlikely to stop being their guarantor.

We appreciate that people may not wish to be a guarantor for a long period of time. Some mortgages can last for 25 years and guarantor loans specifically can last up to 7. (Source: Guarantor Loan Comparison)

Maybe you are no longer speaking to that individual, have your own finances to prioritise and do not want to be consumed with being someone’s guarantor.

The issue is that for some applicants with bad credit or low income, they may have only be approved because you agreed to act as their guarantor. Hence, borrowers may reach out to their parents or siblings to be a guarantor so they can leverage off their strong credit score, income and employment. Therefore, to stop being their guarantor altogether puts the whole loan out of sync – including loan amount, loan term and repayments.

So what are my options?

Well, there are natural ways to stop being someone’s guarantor. This could involve having the loan paid off in full – because therefore there is no need to be a guarantor any more. If the main borrower is in a financial position to do so, this would be a simple way to clear the account and end any further involvement. If the individual has a better credit score than before, they could always repay the guarantor loan or guarantor mortgage loan and then just apply for a new personal loan under better terms.

If you are in the financial position as a guarantor, you could always agree to pay off the loan for the borrower. This could be a large sum of money, but is not uncommon with parents covering their children’s debts.

Can I switch guarantor with someone else?

No, it is not as simple as that. Again, the terms of the loan have been based on the original guarantor’s criteria: their income, assets, employment and credit rating. Bringing in a new guarantor could mean different loan terms or even the loan not being approved in the first place.

There are some companies that have multiple guarantors, e.g TFS Loans. In some circumstances, there could be an opportunity to keep just one and not the other, provided that the loan has been paid on time for several months or years already.

What if the guarantor dies?

If the guarantor dies, their next of kin is technically responsible to step in and be the guarantor instead. In some extreme cases, the lender has had a right on the estate of the deceased in order to recuperate lost funds.

What you can do as a guarantor.

To avoid any regrets down the line, the best thing you can do is simply be aware of the risks involved with being a guarantor. It is important to work with someone that you really know and trust and will still likely be in touch with in a few years’ time.

Boyfriends, girlfriends and colleagues will come and go, but parents and siblings will always be a constant in your life. Also, be sure to have a full read through of the loan agreement before proceeding. It is good to understand how much you would require to pay if need be and it’s also worth checking in with your lender and borrower once in a while to see how repayments are going and how much is left on the account.


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