Are Guarantor Loans as Bad as Payday Loans?
Could it really be true that Guarantor Loans as Bad as Payday Loans? Gillian Guy, the chief executive of Citizens Advice, has just warned that.
So-called guarantor loans have the potential to be “just as damaging” for borrowers as payday loans
The reason she highlighted is the fact that the person that is being the guarantor is not always fully aware of their full financial responsibilities.
The family members, friends or whoever has stood as guarantor for the loan, can be pursued legally for any remaining debt if it is not paid, which could mean the debt being passed to debt collectors and County Court Judgments, even if the original borrower has died.
She went on to say:
Guarantor loans carry with them huge risks and our evidence shows people are getting involved without being fully aware of the dangers of the cases investigated by Citizens Advice, 43% of guarantors were unsure of the extent of their responsibilities.
Please be sure you read all of the terms and conditions of any new loan or credit agreement before you sign and proceed, which applies to both borrowers and guarantors equally.
There are more details on the BBC website.