Guarantor or co-debtor: the risk you sign for someone else
Short answer
A guarantor and a co-debtor answer for someone else’s loan with their own property and income, and if payments stop the lender may turn to them without first exhausting its options against the main borrower.
The two roles are not the same
A co-debtor is a party to the obligation itself and owes equally. A guarantor secures someone else’s obligation, but the extent of that liability and the order in which it is pursued are set by law and by the contract. In both cases the signatory’s property is available to the lender.
What happens on arrears
The main borrower’s delay also reflects on whoever signed for them — including in their credit history. Many people find out about the arrears only when they apply for credit themselves and are refused.
What remains after paying
A guarantor who has paid acquires a claim against the main borrower for what was paid. On paper that is protection; in practice its value depends on whether the borrower has anything to repay with. That is why the decision is weighed before signing, not after.
Frequently asked questions
- Can I withdraw from a guarantee later?
- Unilateral withdrawal from security given under a live contract is generally not possible. A change requires the lender’s consent or the underlying obligation ceasing to exist.
- Does guaranteeing affect my own borrowing?
- Yes. The commitment is taken into account when your ability to pay is assessed, even if you have not paid a single instalment.
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