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Guarantor Loan Alternatives

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  • You could consider a credit card instead
  • Guaranteed credit limit
  • Check your eligibility with no impact to your credit score
Check my eligibility This won't affect your credit score

Representative example: Amount of credit £1,200. Interest rate: 34.0% pa (variable) Representative 34.0% APR (variable)

What is a guarantor loan? 

A guarantor loan is one where somebody else – usually a friend or family member – agrees to take over the repayments if you can’t make them. That person is known as the guarantor. These types of loans can prove useful if you have poor credit or have been rejected elsewhere. This is because they’re seen as a lower risk to lenders.

A guarantor loan works in much the same way as other loans, in that you make the repayments in instalments as agreed with the lender, with the addition of a guarantor in case you’re unable to keep up with the agreement.

If you do have a less than perfect history with managing credit previously, a guarantor loan is not the only option, however. A 118 118 Money Simple Interest Rate Credit Card can be an alternative as we consider applications from those with poor credit too. Our credit cards or personal loans don’t have a requirement for a guarantor.  

Apply for a credit card from 118 118 Money with confidence
Use our eligibility check to find out what credit limit we’ll offer you before you apply, without affecting your credit rating!
Check my eligibility This won't affect your credit score
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Why choose a 118 118 Money Simple Interest Rate Credit Card as an alternative to a guarantor loan?

If you’re considering an alternative to guarantor loans, the 118 118 Money Simple Interest Rate Credit Card could provide the answer:

A credit limit of up to £2,000.

 

You can repay in full or via instalments, whichever suits your situation. Bear in mind there will be a minimum repayment to make, and it’s always recommended you repay more than this if you can.

51 days interest-free when you repay your balance in full each month.

This 118 118 Money Simple Interest Rate Credit Card does not charge any fees, although some third parties may have their own – for example, when you withdraw cash from an ATM.

 

 

You can check your eligibility using our simple tool, and it won’t affect your credit score.

 

 

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Want to apply for a credit card?

  • Alternative to guarantor loans
  • No fees*
  • Check your eligibility with no impact on your credit score
Check my eligibility *We do not charge any fees. However, third party vendors may have their own charges. An example of this is an ATM where a usage fee could apply.

Do I need a guarantor loan?

There could be any number of reasons why you choose to take out a loan. You may need it for a sudden, unexpected expense, such as to fix a faulty boiler or a broken-down car. Or perhaps you want to cover the cost of a home improvement project. Whatever the reason, it’s vital that you weigh up all your options before you make a final decision.

A guarantor personal loan could be right for you if you have poor credit or have been declined by other lenders. But guarantor loan companies aren’t the only answer – and that’s where 118 118 Money comes in.

We don’t offer guarantor loans, but you can borrow between £1,000 and £5,000 over 12 to 36 months without a guarantor. And, if you don’t think a loan is what you need, a 118 118 Money Simple Interest Rate Credit Card may prove the ideal alternative. With a credit limit of up to £2,000 and the ability to be flexible in your repayments, it’s certainly an option worth exploring.

What are the key differences between a credit card and a guarantor loan?

To decide which is right for you, it’s important that you understand the major differences between guarantor loans and credit cards:

 

Credit Cards

Guarantor Loans

Representative APR

Tends to be lower than guarantor loans

Typically higher than credit cards

Repayments

Repay the balance in full, make a minimum monthly repayment or choose any amount in between

There will be a fixed monthly instalment for you to pay, although you may be able to repay early if you can afford to

Credit Limit/Amount

A continuous line of credit, as long as it’s within the agreed limit

The agreement stops once the loan amount (plus interest) is repaid in full

 

Guarantor loans vs no guarantor loans?

One requires a guarantor who can repay the loan should you default on the payments. The other, a non-guarantor loan, is solely the responsibility of the borrower to repay.

Guarantor loans can be aimed at those with a less than perfect credit score, as such they do typically come with higher APRs when compared to a non-guarantor loan. This is partly because those with poor credit can be seen as a high risk versus someone with a good credit track record.

You may also be wondering if a guarantor loan can help to potentially improve your credit score? All types of credit have the potential to improve your credit score, but they need to be used as stated in the terms and conditions and payments have to be made as agreed with the lender. You also have to ensure you keep up with any other credit commitments you may have.

A 118 118 Money Simple Interest Rate Credit Card can also help to improve your credit score. As with other credit cards, you must make at least the minimum repayment monthly.

Am I eligible to apply?

Think a credit card from 118 118 Money might be a more suitable option than applying with a guarantor loan lender? Before you apply, you can use our eligibility checker to see if you’ll be approved – and it won’t affect your credit score, full applications require a credit search. If you choose to go ahead with your application, to be considered for a 118 118 Money Simple Interest Rate Credit Card, you’ll need to:

  • Be a UK resident
  • Be aged between 18 and 70
  • Earn at least £8,400 a year
  • Not be in arrears with another lender
  • Have had no default payments in the past six months

As part of the eligibility check, we’ll also need a few basic details, such as your:

  • Name
  • Email address
  • Date of birth
  • Current employment and residential status
  • Net monthly income
  • Outgoings
  • Home address

Will my credit score be affected when I apply?

It doesn’t matter if you’re seeking a guarantor loan or a credit card – lots of applications in a short space of time can have a negative impact on your score. But our eligibility checker is a way to find out if you’ll be approved before you apply – and it won’t have any effect on your rating.

If you’re accepted, making your repayments in full and on time every month can actually improve your score, as it proves you can use credit responsibly. Of course, failing to do so can have the opposite effect and lower your score. And, in the case of a guarantor loan, it is likely to mean your guarantor has to make the repayments for you.

Will I need to go through a credit check?

Yes. An application for a small or large loan with or without a guarantor, credit card or any financial product will involve the lender doing a credit check. If you apply for the 118 118 Money Simple Interest Rate Credit Card, we’ll carry out a check so that we can see your borrowing history. This will help us to decide whether to approve your application.

You can always check your credit report before you apply and don’t forget to use our eligibility tool first, which won’t have any impact on your credit score. Should you then decide to complete a full application, we will conduct a full credit search which will be visible on your credit file.

What if I need help or have questions?

We aren’t guarantor loan lenders, but if you have any questions about our other loans or credit cards, you can always get in touch with our Customer Services team.

All you have to do is call 08000 118 222, with lines open 8am-7pm Monday to Saturday and 9am-5pm on Sundays and Bank Holidays. Alternatively you can use our web or app chat. 

Apply for a guarantor loan alternative with 118 118 Money

Decided that a credit card is a better fit than a guarantor personal loan? Use our eligibility checker before you apply, without affecting your credit rating.

Apply for a guarantor loan alternative from 118 118 Money

Want to apply for a credit card with 118 118 Money? You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

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Guarantor Loans FAQs

We are not guarantor loan lenders. So, if you’ve decided this type of borrowing is perfect for your situation, we recommend doing your research and weighing up your options to make sure you find the best guarantor loan for you.

A guarantor loan works in much the same way as a standard loan. You borrow an amount of money that is to be repaid over a certain period of time. This is usually done via monthly instalments with interest attached, so you will end up repaying more than you borrowed in the first place.

The major difference with a guarantor loan is that someone you trust, such as a friend or family member, agrees to step in and pay on your behalf, if needed. So, if for whatever reason you were unable to make a repayment, your guarantor would also be legally responsible for the payments.

Guarantor loans can be suitable for those with poor credit. This is because there’s less risk to the lender, who has the assurance of another person co-signing the agreement and guaranteeing to make the repayments if the borrower is unable to. So, it may be possible for you to be approved for a guarantor loan with bad credit.

We don’t offer these types of loans, but we can offer credit cards for bad credit as an alternative. Of course, we can never promise that you’ll be accepted before we know all the details.

If you’re approved for a credit card with us rather than applying with a guarantor loan company, our current representative interest rate is 34.0% pa (variable). This is based on a credit limit of £1,200 while our representative APR is 34.0%.

When we look at your application for a credit card, we’ll review your credit score as part of that process. Amongst other checks, we’ll also check if you’re on the electoral register and see if you have any CCJs against your name. If your application is rejected but then your circumstances improve and you’d like to try again, you’re welcome to do so after 180 days.

If your application is approved, your card and PIN will arrive in the post within 10 days. For security reasons, they’ll arrive separately.

Don’t think a guarantor loan is quite right for you? The 118 118 Money Simple Interest Rate Credit Card could prove the perfect alternative. Before you apply, check your eligibility for our credit card to find out if you’ll be approved as well as the credit limit we can offer. If you decide to complete a full application, we do conduct a full credit search.

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Ready to apply for a credit card from 118 118 Money?

You can try our eligibility check first to see if you’ll be accepted before you apply – and it won’t affect your credit rating.

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