Guarantor Loans
A credit line might be better for you.
Are you looking for guarantor loans? Try Drafty instead
Instead of a guarantor loan, we could offer you something better (at least in our opinion!). We offer a line of credit (up to £3000). Plus, we'll consider you even with a bad credit score or bad credit history.
Here's how Drafty's line of credit could help you:
- Speed - You'll get a fast decision. And if approved, we’ll send the cash to your bank in under 90 seconds
- Borrow what you need – Apply for up to £3000 and withdraw up to your approved credit limit when needed
- Reuse - Once you’ve used Drafty, you can withdraw up to your agreed limit again. No need to reapply
- No fees – We don't charge any extra fees. Also, you only pay interest on what you use. It doesn't cost you a penny if you don’t use any of your credit.
At Drafty, we’re proud of our customer service. See why we’re rated great on Trustpilot.
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
Drafty is FCA Authorised
We’re an FCA-authorised and regulated direct lender. Our authorisation number is 689378.
Responsible lending is our biggest priority, and we want to ensure our customers' experience is great. We believe in ensuring that you are fully informed about the costs, fees, and repayment terms of our credit line. To achieve this, we have taken great care to present all charges, including interest rates and fees, upfront. No hidden costs or unwelcome surprises - everything is clear and easy to understand.
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
What is a guarantor loan?
However, some lenders will have their own rules about who is eligible to be a guarantor.
Guarantor loans can be a good option if you’re starting out and don’t have a credit record or have a history of poorly managing your credit. A benefit of a guarantor loan is that it gives you a chance to build a good credit history, providing you keep up with your loan repayments.
How do guarantor loans work?
Guarantor loans can be secured and unsecured. In a secured guarantor loan, the money you borrow is tied to an asset owned by the guarantor, like their house. This provides added security for the lender.
Using a guarantor loan requires serious thought. Plus, it's worth knowing that you can only change your guarantor during the loan application process. You can't change your guarantor once both you and your guarantor have signed the loan agreement, and the loan amount has been paid out.
Who can apply for a guarantor loan?
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
Who can be a guarantor for a loan?
Generally speaking, a guarantor must be at least 21 years old, live in the UK, have a good credit score, and they usually need to be a homeowner. Individuals below 21 years of age, your spouse or partner (if they are not 100% financially independent from you) can’t become your guarantor.
They’ll also need to provide evidence that they can pay back the loan, such as proof of employment, income, or home ownership. If you are unable to pay back your loan, your guarantor will be responsible for making the monthly repayments.
Are guarantor loans a good idea?
- Guarantor loans can benefit individuals with bad credit ratings or a limited credit history who may struggle to qualify for traditional loans.
- Before considering a guarantor loan, assess your financial stability and ability to repay the loan. While the guarantor provides additional security for the lender, both you and the guarantor are responsible for loan repayment. Failure to repay could strain your relationship with the guarantor and negatively impact both of your credit scores.
- Guarantor loans may have higher interest rates and fees than traditional loans. It's essential to review the loan terms and conditions, including interest rates, fees, and repayment terms, to ensure it's affordable for you.
- Consider the implications of involving a family member or friend as a guarantor. Ensure that you and your guarantor fully understand your obligations and the potential risks involved.
- Explore alternative financing options before committing to a guarantor loan. Depending on your financial situation, you may qualify for other types of loans.
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
How much do guarantor loans cost?
How is Drafty an alternative to guarantor loans?
- Flexibility: Drafty provides a revolving line of credit, allowing borrowers to access funds as needed, up to their approved limit.
- No guarantor is required: Unlike guarantor loans, Drafty does not require a guarantor. You apply individually and are assessed based on your personal details and creditworthiness, removing the need for a guarantor.
- Flexible repayment terms: You can make minimum monthly payments or pay off the balance in full, depending on what works best for your financial situation. This flexibility allows you to manage your repayments in a way that suits your budget and cash flow.
- Quick access to funds: If you need to borrow money on the same day, Drafty may be able to help. If approved, you could get your line of credit sent to your bank within 90 seconds.
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
Am I eligible to apply for a Drafty line of credit?
To apply online with Drafty, you have to be:
- Aged 18 or over and employed
- Earning at least £1,250 a month
- A UK resident with an active UK bank account and debit card
After you’ve provided the required details, we’ll do some credit and affordability checks. If approved, we'll agree on a credit limit and send the cash to your bank within 90 seconds. You can even consider us as an alternative to loans for bad credit as we might consider you for our line of credit even if you have a bad credit rating.
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
How to apply for a Drafty line of credit?
Here's how you can apply:
- Apply – Apply online by visiting our website. Enter a few personal details to help us understand who you are.
- Get a credit limit – If approved, you’ll be given a credit limit of up to £3,000. You can use it as you require, paying interest only on what you use.
- Flexible payment – You’ll need to repay a minimum amount every month. Want to repay early? That’s fine with us! We don’t charge anything extra. Also, it’s easy to make payments through our app.
- Fast Cash transfer – Use Drafty whenever you need to, and we’ll send the money to your bank in under 90 seconds.
Representative 96.2% APR (variable)
Subject to status. T&Cs apply.^
How much can I borrow with a guarantor loan?
Other alternatives to guarantor loans
The are several alternatives to guarantor loans, including:
Secured loans: Secured loans require collateral, such as a vehicle or property, to secure the loan. This reduces the lender's risk, making it easier for individuals with poor credit to qualify.
Payday loans: These are high-cost-short-term loans, typically for small amounts. They're called payday loans, as they're designed to be repaid on your next payday. While they can provide quick access to cash, they come with very high-interest rates and charges, making them a costly form of borrowing.
Credit Cards: Credit cards offer a line of credit for purchases and payments. Individuals with poor credit may qualify for credit cards which might have higher interest rates and lower credit limits.
Contact Drafty today
- Live chat - Log in or create a new Drafty account to speak to our team through our live chat function
- Drop us a message - If you'd like to send us an email, checkout our contact us page and drop us a line. A member of our friendly team will answer your questions as soon as possible
- Give us a call - We're here to answer your calls on 0203 695 8072 from 9am to 6pm Monday to Friday, and 9am to 1pm every Saturday#
FAQs - Guarantor Loans
Can I get loans for bad credit without a guarantor?
Yes, it's possible to be considered for loans for bad credit without a guarantor. However, they may come with higher interest rates and require other forms of collateral. Lenders who offer bad credit loans without a guarantor may assess your ability to repay based on your current financial situation rather than just your credit history.
Who can become my guarantor?
Almost anyone can be a guarantor. A guarantor must be at least 21 years old, live in the UK, have a good credit score and usually needs to be a homeowner. Here are some people who cannot be your guarantor: Individuals below 21 years of age, your spouse or partner (if they are not 100% financially independent from you).
What should I look for in a guarantor loan?
When considering a guarantor loan, look for competitive interest rates and clear, fair terms regarding the responsibilities of both the borrower and the guarantor. It's crucial to choose a reputable lender who offers transparent information about fees, repayment terms, and the consequences of missed payments.
Can I become a guarantor?
Yes, but it will depend on your financial stability, credit history, and income. Lenders often require guarantors to have a good credit score, stable income, and, sometimes, a certain level of assets. It's a significant responsibility, as failing to meet these obligations can affect your credit score and financial health.
Is it risky to be a loan guarantor?
Yes, it can be risky to be a loan guarantor. If the borrower defaults on the loan, you are legally obligated to repay it, which can impact your financial stability and credit score. Additionally, it could strain your relationship with the borrower if issues arise.
Does being a guarantor affect your credit score?
Becoming a guarantor doesn't automatically impact your credit score. However, if the primary borrower fails to make payments, you're responsible for them. If you also fail to make these payments, this can negatively affect your credit score. Additionally, being a guarantor might limit your borrowing capacity, as lenders could consider the potential liability when evaluating your loan applications.
Will a guarantor loan affect my credit score?
Yes, a guarantor loan can affect your credit score, both as a borrower and as a guarantor. If you're the borrower and make all your payments on time, a guarantor loan can positively impact your credit score. Repaying your loan on time will not impact your guarantor’s credit score. However, if you fail to keep up with repayments then your guarantor will have to step in. This can put their credit score at risk.
Does my guarantor need to be a homeowner?
Whether your guarantor needs to be a homeowner depends on the lender's requirements and the type of guarantor loan you're applying for. For some loans, particularly those that are larger or have a higher risk associated with them (like certain personal loans, or mortgages), having a guarantor who is a homeowner can be a requirement. Lenders usually prefer your guarantor to be a homeowner.
How many guarantor loans can I have?
There isn't a fixed number, but multiple guarantor loans are possible. Having multiple guarantor loans means additional financial responsibilities.
Drafty is an FCA-authorised provider of a Revolving Line of Credit with a credit limit of up to £3000, available to borrow as and when you need it (subject to affordability checks). You only pay interest on what you draw/use.
Representative Example: Assumed credit limit: £1200. Representative 96.2% APR (variable). Annual interest rate 69.4% (variable).
There is no set minimum or maximum repayment term, so long as the minimum monthly repayment sum is met, however, you may repay back early without any fees and save on interest.