Do Guarantors Get Charged Automatically? Find out More



Does My Guarantor Get Charged Automatically?

The nominated guarantor will not be automatically charged for the guarantor loan when an agreement is made. The only scenario where the guarantor is required to pay the loan is if the main applicant fails to do so. This could be because the main applicant has fallen into financial difficulty, or simply refuses to pay.

Consequently, this is why it is very important that both parties signing the contract are fully aware of the obligations that are involved with a guarantor loan.

Why does the guarantor need to pay the loan?


  • It is the main responsibility of the guarantor
  • Only needs to make the payment if the main applicant does not pay the loan back
  • The loan is granted based on the guarantor’s creditworthiness

It is the responsibility of the guarantor to pay the loan if the main borrower does not pay it back. This means that providing the main applicant keeps up to date with payments, there shouldn’t be a need for the guarantor to ever pay anything at all.

However, it is a possible situation that could arise and therefore the guarantor must be prepared.

The loan itself is approved largely on the guarantor’s profile, which is why they are required to pay the loan if the main borrower does not.

The lender will be assessing the guarantor’s creditworthiness far more heavily than the main borrower. This is because the main applicant usually has a poor credit score or a lack of credit history to start with which is why they are applying for this kind of loan.

As a result, the guarantor’s creditworthiness is assessed to make sure the level of risk in approving the loan is mitigated by the lender. Criteria assessed include the guarantors:

  • Age
  • Employment
  • Stability of income
  • Credit score
  • Homeowner status


What will happen if I can’t pay the guarantor loan?


  • Different contact attempts will be made to you first
  • If no repayment plan can be agreed on, the guarantor is contacted
  • Contacting the guarantor is considered the last option
  • One missed repayment will not lead to your guarantor being contacted

If you are the main borrower and unable to make payment then the nominated guarantor will be contacted. The guarantor is only ever contacted as a last chance attempt to resolve the situation. Most guarantor lenders will try different ways to contact the main applicant (such as by phone, email or letter) before the guarantor is also contacted in the same way.



The guarantor will only be contacted if attempts to draw up a modified repayment plan have failed. This may be because it has not been possible to reach you through multiple contact attempts, or because you simply cannot afford it despite changes to the loan agreement.

It is also worth noting that the guarantor is contacted if you have missed a number of repayments. In most cases, the lender will not automatically contact your guarantor simply because you have missed one loan repayment, or are late on a single payment.

What happens if the guarantor refuses to pay?


  • Assets used as security for the loan may be taken by the lender
  • Possible court action
  • Guarantor’s credit score affected

If the guarantor refuses to pay but can afford to do so there are different possible repercussions.

This includes the lender taking assets (such as a vehicle or a property) that have been used as collateral for the guarantor loan. Not all guarantor loans are secured loans, and it can also depend on the loan agreement itself but it can be an option. The lender has the legal right to repossess these items to recover the debt if it is a secured loan.

Another possible scenario is legal action may be taken against the guarantor. This may lead to a court order being granted against the guarantor, forcing the nominated individual to pay the debt.

Whatever course of action is taken, it is worth highlighting that their credit score will be negatively impacted. Credit defaults will be recorded on the individuals’ credit file, as will any court action that is taken against them. This can make it much harder for the person to get access to credit in the future. Want to find out more about can I change my guarantor on a loan, feel free to contact us.

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