Guarantor loan problems: what to do when it goes wrong

Guaranteeing someone's loan is one of the riskiest financial decisions you can make. If the borrower stops paying, the lender will come to you for the full amount.

What being a guarantor means

You've legally committed to repay the entire loan if the borrower can't or won't. This isn't optional — it's a binding contract.

If the borrower stops paying

Step 1: Contact the borrower

Try to understand why they've stopped paying. Can they resume? Can you help them get debt advice?

Step 2: Contact the lender

Ask for an exact statement of what's owed, including any arrears and charges.

Step 3: Negotiate

If you're being asked to pay, negotiate:

Step 4: Get specialist advice

Contact StepChange (0800 138 1111) or Citizens Advice. Guarantor debt is treated the same as any other unsecured debt for the purposes of DMPs, IVAs, and DROs.

Your rights

Can you get out of being a guarantor?

Generally no — it's a binding contract. However:

Lessons for the future

Never guarantee a loan unless you can genuinely afford to repay the entire amount yourself. Treat it as your own debt.