Guarantor vs Joint Applicant

B

bigbadostric

Registered User
Messages
62
Hi all,

Can someone explain the practical differences between someone being a guarantor as opposed to a joint applicant on a loan? I know that under law a joint applicant would be completely liable for the loan should the main applicant default but is this not the case for a guarantor?

Many thanks.
 
Usually a guarantor would ony guarantee a part of the loan rather than all of it.

It is also easier (I think) to remove a guarantor from the loan down the line.
 
If you go jointly on the loan you are jointly liable for paying back those funds from the beginning of the loan for its lifetime.

If you are going guarantor you are only called into play in the case of the loan going into arrears, if there loan is kept up to date you are not liable for anything. Depending on the amount involved you would be guaranteeing the full loan amount unless specifically specified in the loan documentation which you will have to sign.

Someone going jointly is much better security for a bank/building society I dont even know if they will accept guarantors over joint hirers any more
 

Your last line is pretty spot on... to summarise I currently have a loan for which my dad is guarantor. I want to take a payment holiday in June to facilitate spending money for a holiday as the money I had saved has unexpectedly been used to repair my car.

Obviously doing this is cheaper than using my credit card, my CC is completely clear and want to keep it that way. The bank claim that they can only facilitate payment holidays from the start of a loan term so I applied again but now they want greater security for the same amount, despite the fact that I am now in well paid employment whereas I didn't even have a job when I got the original loan.

Sign of the times when I need more security despite a much much greater capacity to repay debt!

Thanks for your reply, was helpful.
 
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