Can you stop being a guarantor?

By Daniel Tannenbaum
Published: May 21, 2019

Knowledge Hub / Guide / Can you stop being a guarantor?

Can I stop being a guarantor?

Can I stop being a guarantor?

If you have signed up as someone’s guarantor for a guarantor loan, it is not possible to stop being one if you have already signed the contract, and the loan has been granted.

Whilst the reasons why you may decide to no longer be a guarantor can be credible (for example, the average span of a guarantor loan can end up lasting 60 months in total) and over this course of time, you may change your mind about being one’s guarantor. However, despite this, it is important to remember that you cannot stop being a guarantor once approved.

As a result, this is why you should very carefully consider the pros and cons of being a guarantor before signing an agreement to be one, and be sure that you are fully aware of the consequences and requirements of being one, too.

Why can’t I stop being a guarantor?

The fundamental reason as to why you can’t suddenly no longer be someone’s guarantor, is that you were a main deciding factor in the approval process of the loan itself to start with.

This is because when the lender is assessing whether or not to approve or decline the loan application, they will be primarily assessing your history as the guarantor, rather than the main borrower (who usually does not have as good as credit history, hence the need for a guarantor for their loan).

Consequently, the money lender looks thorough at your affordability, credit history, employment status, homeowner status, location and age when deciding if the loan is approved, as well as for how long and how much is borrowed over all.

All of this means that if the guarantor was suddenly removed, and a new one was brought in instead, this could change the terms and conditions that the original loan was approved on the basis on, which could mean potentially a higher risk for the lender. Furthermore, the loan may have never been funded to start with, if a new guarantor with different credentials is given.





What if the guarantor dies?

Whilst unlikely, it is possible that if the chosen guarantor dies, a spouse of the decease can replace them. This will be dependent on the individual lender.

It is also possible that the lender could have a claim on the property or estate of the guarantor in order to recover debt.

Are there any ways to stop being a guarantor?

Whilst it is not possible to suddenly stop being a guarantor, there are ways in which you can get out of it. The following circumstances can allow you out of a guarantor loan agreement, such as:

  • If the borrower or guarantor pays the loan back early: this terminates the agreement. The majority of guarantor lenders will enable you to make early repayments, even if it is supposed to last five years. Nevertheless, it is important to keep in mind that you may need to pay additional costs for closing the loan earlier than anticipated.
  • If the lender goes bust: the only other possible way you can get out of being someone’s guarantor, is if the loan provider happens to go bust. This is unlikely to happen, and shouldn’t be relied upon as an option, evidently!

Do I have time to change my mind on being a guarantor?

Yes. When you initially agree to become a guarantor for someone, you are given a grace period of two weeks, typically, by most reputable lenders. This two week period starts from when the loan itself was funded.

Usually, the money granted is sent to the guarantor’s bank account first. After this, the funds can be sent directly to the borrower or back to the loan provider.

If the guarantor changes their mind during this 2-week period, there is no extra charges to giving the money back.


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