Low APR guarantor loans

Interest rates on guarantor loans aren't going to be the most competitive, but they can help people with poor or limited credit to access better rates than they might do alone.

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A guarantor loan involves you, the borrower, asking a friend or relative who is willing and able to financially back you. This means your guarantor agrees to take on your loan repayments if you cannot.

By asking a friend or relative with a good credit rating to be your guarantor, they can help you access more attractive interest rates than specialist loans for bad credit. If your guarantor owns their own home or has a mortgage, the interest rates offered will be even lower.

When shopping around for a guarantor loan, it’s better to focus on the total amount payable, rather than the interest rate, to guide your decision.

Finder’s six tips to find the cheapest guarantor loans

When it comes to comparing guarantor loans and finding the cheapest rate, there are some key considerations.

  • Focus on the total repayable. It’s better to guide your decision on the total amount repayable, rather than the lowest rate. This will take into account any fees.
  • Apply with a guarantor who owns a home. If your guarantor is a homeowner (owns their property outright or has a mortgage), you will be able to access lower interest rates than with a guarantor who rents or lives with their parents.
  • Shop around. Compare loans from a range of lenders to find the best rate you’re eligible for. Be aware, the APR you see advertised isn’t always guaranteed and you may be offered a higher rate.
  • Check the qualifying criteria. Do both you and your guarantor meet the criteria?
  • Can you pay early and save on interest? Will you be penalised with fees if you increase your payments or pay off your loan in a shorter term?
  • Keep the loan as short as possible. Opt for the shortest loan you can while ensuring that the monthly repayments are affordable.

Compare guarantor loans

Table: sorted by representative APR, promoted deals first
Name Product Total Payable Monthly Repayment Representative APR
Representative example: Borrow £10,000.00 over 3 years at a rate of 49.7% p.a. (fixed). Representative APR 49.7% and total payable £17,537.04 in monthly repayments of £487.14.
Representative example: Borrow £6,000.00 over 3 years at a rate of 47.9% p.a. (fixed). Representative APR 47.9% and total payable £10,364.04 in monthly repayments of £287.89.
Representative example: Borrow £5,000.00 over 3 years at a rate of 49.9% p.a. (fixed). Representative APR 49.9% and total payable £8,782.92 in monthly repayments of £243.97.
Representative example: Borrow £10,000.00 over 3 years at a rate of 49.7% p.a. (fixed). Representative APR 49.7% and total payable £17,537.04 in monthly repayments of £487.14.
Representative example: Borrow £10,000.00 over 3 years at a rate of 47.8% p.a. (fixed). Representative APR 47.8% and total payable £17,259.12 in monthly repayments of £479.42.

Compare up to 4 providers

Late repayments can cause you serious money problems. See our debt help guides.

What fees can apply to guarantor loans?

  • Overpayment. Some lenders charge overpayment fees if you make a larger repayment than your scheduled monthly amount.
  • Early repayment or redemption fee. If you pay off your loan in less time than the original loan period offered, you may be subject to an early repayment charge. There is usually no fixed amount, but often the lender may charge one or two month’s interest.
  • Arrangement or set-up fee. Many lenders waive these fees, but not all, when you first set up your loan, so it’s always good to check.
  • Late fees. If the borrower misses a payment, they could be charged a late fee by the lender. Often this is around £25, but it could cost more as it adds time to the length of the loan.

Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

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