If you guaranteed someone’s loan, the lender should have checked that you could afford to pay if the borrower couldn’t, without hardship. It should also have checked the borrower could afford it, rather than just relying on you.
When a guarantor might have a complaint
- The lender didn’t ask about your income, spending or other debts
- You were on a low income or benefits and couldn’t realistically have paid
- The borrower clearly couldn’t afford the loan, and you were chased soon after it started
- You weren’t properly told what you were agreeing to
What you could get
If upheld, a guarantor is usually refunded what they paid towards the loan, with 8% interest, and released from any further liability.
Guarantor lenders that have closed
Amigo and Buddy Loans have closed. For George Banco and TrustTwo, loans approved up to 31 March 2021 were covered by a scheme whose deadline has passed, but later loans can still be complained about.