help! being a guarentor

[johnlennon]

a friend has asked if i wold be a guarentor for a 3,000 loan for her which she will be paying off over six years. i understand some of the risks to this but i have recently bought a house. i desperatly need to know if should she not pay this back and mess about will this have any effect on my house if i cant repay the loan and would it effect my credit rating at all if she couldnt? does it effect your rating just by being a guarentor?? thanks!

[dzug]

It doesn't Affect just by being a guarantor, but it most definitely will if they come after you for the money and you can't pay.

[Ethel]

Yes, to all.

If she 'does a runner' and you don't pay the debt yourself, the lender can take you to court to enforce the debt.
You will then have a County Court Judgement (CCJ) which will affect your credit rating.
The lender can apply for a charging order to be put on your house so the debt is paid when your house is sold.

Being a guarantor can affect your credit rating

Frankly I would say no. The fact of needing a guarantor means she is a bad risk. Don't do it.

[johnlennon]

thanks guys! im thinking of saying that im already a guarentor for someone else to prevent offending her....i take it you can only be a guarentor once?!

[Oneeyedvic]

No, you can be a guarantor to as many people as you want.

I would thoroughly recommend against you being a guarantor - a finance company have looked at their situation (including their past financial history) and do not believe that they will pay.

You do not have access to the same information that they have and so are making a decision based on friendship rather than facts.

3000 over 6 years is (in my opinion) not a very difficult loan to get - if they can't achieve this by themselves then there would be presumably a detrimental credit history to their name.

Please also note that it is usually not just a guarantee than you are signing but a 'guarantee and indemnity' - which goes further. It means that you indemnify the finance company to ALL their costs - ie not just the loan, but any other costs that they incur in enforcing their agreement (eg tracing agents, recovery agents, court action against them etc)

[bednobs]

hi i agree with above - it's like taking out the loan yourself except you get none of the benefit of the money AND you have to rely on someone else to pay it back. I would urge you no matter how close a friend this person is DO NOT o it. Even close elatives, i would say dont do it. Think of it like this - you are doing her a favour by preserving your friendship for future!

[terambulan]

How offended will you be if she stops payments, you lose your home & she runs off laughing.

Have you got MUG tatooed on your brow? say NO!

[eyebrows]

can you be my guarentor? please dont offend me, i only need �5k, for a new house for my wife in nigeria...i accepy paypal...

[johnlennon]

okok ! lol at least i know your all a straight forward talking bunch! im totally decided and now i dont even care if i offend her lol! ill just show her the advice you given -thanks guys mucho appreciated!!!!!!!!!!

[rover123]

if they fulter on the loan your name will be linked to it
and it may affect your credit rating