All clients seeking to borrow loans from Moher Flagstone Loans should have a guarantor.

Our company policies require a guarantor to be provided during the application process and their details to be fed into the system before the application is reviewed. A guarantor should be made aware of the role they are playing in any loan undertaking. This helps the guarantor remain aware of the seriousness of the role that they are involved in.

What is a guarantor?

A guarantor is an individual who decides to co-sign on a loan alongside the borrower. The guarantor is liable to paying a loan balance on the borrower's behalf in case the borrower defaults in making repayments as per the loan agreement. The guarantor is always at the best place in knowing if the borrower will pay or will fail to pay the loan. With the help of the guarantor, we will stand at a better place in advancing the right amount that the borrower will be in a position to pay back in good time. Standing as a guarantor is the best way to help the borrower get a loan without having to lend them the money yourself. This kind of lending helps the borrower to improve their credit rating as they repay the loan.

Who can take place as my guarantor?

There are no precise rules as to who can stand as your guarantor. A guarantor could either be a family member, friend, workmate, or another individual known to the borrower. The choice to guarantee a loan remains on the guarantor as the borrower can not force someone to be a guarantor. In as much as there are no precise rules as to who can be a guarantor, there are guidelines as to who can qualify to play the role of a guarantor. This person needs to meet a certain criteria which include:

  • Have a monthly source of income
  • Have an agreeable credit history
  • Have property within the UK region
  • Have known the borrower and thus have confidence in their repayment ability

Additional guarantor information

The record of poor credit rating among individuals is on the rise especially in the UK region. Before taking the place of a guarantor, it is good to know more about the borrower and their credit history. A bad credit rating does not always mean that one will default in paying the current loan. You can find out the cause for the bad credit rating. It could be that the borrower's circumstances changed and that they are now in a better position to repay the loan well.

As a guarantor in a loan agreement, you have taken oath to bear responsibility in case the borrower fails to pay the loan in time. In case of arrears, the lender is at liberty to deduct the amount in arrears from the guarantor's account.

Before signing as a guarantor, you should be certain that the borrower is in a position to repay the loan. Look at the loan installments the borrower seeks to take and use discernment to identify if they are in a position to meet the obligation. Clear communication should also be maintained between the guarantor and the borrower so that in case of arrears, the guarantor is prepared of what will happen.