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Information written by Connor Campbell Last updated on 31 March 2022.

What is a homeowner guarantor loan?

With a homeowner guarantor loan, you could borrow money by applying to a lender with a guarantor who owns property.

This is especially useful for people finding it hard to secure a loan, perhaps because of a bad credit, or a lack of credit history.

What is a UK homeowner guarantor?

A guarantor is someone, usually a trusted loved one such as a member of your family or a close friend, who is willing to financially back your loan and promises to pay the debt if you cannot.

In the case of UK homeowner guarantor loans, the guarantor must own property.

How do homeowner guarantor loans differ from other guarantor loans?

While some guarantor loans allow both the borrower and guarantor to be tenants, homeowner guarantor loans require the guarantor to own property.

Due to the added security of the guarantor being a homeowner, you may be able to borrow more at a lower rate than non-homeowner guarantor loans.

» COMPARE: Guarantor loans

Does a guarantor have to be a homeowner?

For a homeowner guarantor loan, the guarantor must own property.

However, other forms of guarantor loans are available that allow the borrower to apply with a guarantor who is a tenant.

How does a homeowner guarantor loan work?

In many ways, a homeowner guarantor loan works just like any other loan. You borrow money from a lender and then pay that money back, with interest, over a set period of time.

The one major difference is that this loan requires a guarantor because it is available to people with bad or limited credit histories.

What further distinguishes a homeowner guarantor loan from other guarantor loans is the need for the guarantor to own property.

If you, as the borrower, were unable to make your loan repayments, the guarantor is legally required to make the payments in your place.

For the loan application to be approved, the guarantor would need to pass affordability and credit checks to prove they are in position to pay back the debt in full if needed.

This is why it is so important to carefully consider who you ask to be your guarantor and, as a prospective guarantor, whether to say yes.

» MORE: What to consider before becoming a guarantor

Does having a homeowner guarantor help get a loan?

Having a homeowner guarantor will improve the chances of your guarantor loan being approved.

This is because lenders view homeowners as a safer prospect than those without the ability to use property as security.

If you are unable to find a guarantor who owns property, however, there are lenders who offer non-homeowner guarantor loans.

» COMPARE: Non-homeowner guarantor loans

How much can I borrow with a homeowner guarantor loan?

Normally, homeowner guarantor loans range between £1,000 and £10,000.

However, some lenders may allow you to borrow as little as £500, while others may allow you to borrow more than £10,000.

Pros and cons of a homeowner guarantor loan

You should always think carefully before taking out a loan. This is particularly true of a homeowner guarantor loan, as it involves bringing a third party on board as your guarantor.

Below we take a look at the pros and cons of applying for a homeowner guarantor loan.

Benefits of a homeowner guarantor loan

  • As a borrower, you can access funds despite a less than perfect credit situation.
  • The interest rates on homeowner guarantor loans can be lower than both standard guarantor loans and other bad credit loans such as payday loans.
  • If you keep on top of your repayments and show you are a trusted borrower, you can improve your credit score.
  • You can pay the full loan off at any time, but you may be subject to an early repayment charge.

Risks of a homeowner guarantor loan

  • Although interest rates can be lower than payday loans and standard guarantor loans, they are usually higher than personal loans.
  • Even if your guarantor’s personal circumstances change, they will be liable for the loan if you, as the borrower, are unable to make the repayments.
  • If you or your guarantor is unable to make the repayments, it could negatively impact their credit score.
  • If your guarantor has to step in and make the repayments, it could put a strain on your relationship.

How to apply for a homeowner guarantor loan

When applying for a homeowner guarantor loan, you will need to have a UK address and bank account.

The application process starts by you selecting the loan amount and term, and submitting your personal details and the name of your property-owning guarantor.

Both the borrower and guarantor will then go through affordability checks, taking into consideration regular income and all outgoings, such as rent or mortgage payments, household bills and living costs. This process may take place over the phone.

You will both also be subject to a credit check. Some lenders do this via a soft check which does not leave a mark on your credit file, whilst others will do this via a full credit search so check this before you proceed.

Once the application has been submitted, homeowner guarantor loans can be approved in less than 24 hours, often with a payout on the same day.

Alternatives to homeowner guarantor loans

There are a number of alternatives to homeowner guarantor loans, including non-homeowner guarantor loans.

If you can’t find an appropriate guarantor for either form of guarantor loan, then you could look into a bad credit loan that doesn’t require a guarantor.

» COMPARE: No guarantor bad credit loans

There are other bad credit loans available, including secured bad credit loans where you can use your own property as a security against the loan.

» COMPARE: Secured bad credit loans

Homeowner Guarantor Loans FAQs

Can a retired homeowner be a guarantor?

Yes, for both homeowner guarantor loans and non-homeowner guarantor loans, the guarantor can be retired as long as they have a regular income, such as a pension or benefits. However, lenders usually ask for a guarantor to be under the age of 75 when the loan term ends.

Can a tenant be a guarantor?

Yes, a tenant can be a guarantor. However, they cannot be a guarantor for a homeowner guarantor loan because they do not own a home.

Instead, you would need to look for a non-homeowner guarantor loan.

How much does a homeowner guarantor loan cost?

How much a homeowner guarantor loan costs will depend on the interest rates of the lender in question, and the term of the loan itself.

Make sure you check the APR (Annual Percentage Rate), as that will indicate how much you will have to pay in interest and charges.

Our comparison page has representative examples for each lender, to give you a better idea of how much your homeowner guarantor loan will cost.

» MORE: Loans and APR - what you need to know

How long does a homeowner guarantor loan last for?

How long a homeowner guarantor loan lasts will vary from lender to lender, and will depend on the term you select.

However, they tend to range between one and five years.

What happens if I get turned down?

Firstly, before you apply you should check the credit files and scores of both the borrower and guarantor to avoid being declined.

However, if you are turned down for a homeowner guarantor loan, then you should first ask your lender why your application was rejected.

Often it will be due to your guarantor failing to meet the lender’s eligibility checks.

If this is the case, you can try to find a more suitable guarantor and once again apply for a homeowner guarantor loan.

You may also want to consider applying for a smaller loan, and/or with a shorter term, but take guidance from the lender and do not make repeated applications until you have identified and resolved what the issue is.

How does the homeowner guarantor loan affect the guarantor?

If the borrower pays off the loan in full, then there is no impact on the guarantor.

However, if the borrower can’t make a repayment, or cannot afford to pay off the loan overall, then it becomes the responsibility of the guarantor.

If the guarantor then can’t meet the repayments, their credit score may suffer. The debt could also be passed on to a debt collection agency, and the guarantor may face legal action.

It is also important to consider the potential strain any financial difficulties could cause between you and your guarantor in the event that you cannot repay the loan.

Can I get a loan for bad credit with no guarantor?

While you would not be able to get a guarantor loan without a guarantor, there are other bad credit loans available. These traditionally carry higher interest rates.

You can find the best bad credit loan for your circumstances with our handy comparison table.

» COMPARE: No guarantor bad credit loans

Do I need to get a credit check when applying for a homeowner guarantor loan?

During the application process, both the borrower and guarantor will be subject to a credit check.

As the borrower, bad credit or a limited credit history won’t impact on your ability to get the loan. However, it is important for your guarantor to have a clean credit history.

For the borrower, this will be a hard credit check that will appear on their credit file. For the guarantor, however, it is a soft credit check that will not negatively affect their credit score.

Can I pay off my loan early?

Yes, you can pay your homeowner guarantor loan off early. However, you may be required to pay an early repayment charge, depending on your lender.

What if I can’t make my repayments?

If you as the borrower cannot make your repayments, then that responsibility will fall to your guarantor.

It is very difficult to stop being a guarantor once the loan is agreed. Therefore you should not consent to being a guarantor if you think that you would be unable to make repayments if asked at some point in the future.

How do I improve my credit score?

Credit scores can feel imposing and hard to influence but it is important to remember that they are not set in stone. There are quick steps you can take to improve your credit score. These include:

  • Making sure you are on the electoral roll by registering to vote
  • Fixing any mistakes on your credit report
  • Setting up direct debits
  • Stopping frequently applying for credit in a short time frame

Longer-term options for improving your credit include using credit (but not nearing the credit limit) and paying your bills on time.

» MORE: How to improve your credit score

About the author:

Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more

*Eligibility Service:

The loans eligibility service is fully provided by Monevo.  The data you supply is directly submitted to Monevo and is used to retrieve loan quotes from their panel of lenders.  By using their loans eligibility service you are agreeing to Monevo’s terms and conditions and privacy policy which can be found at

**Guarantor Loan:

A guarantor loan is where the borrower is backed by a guarantor. This means that if the named borrower misses a loan repayment, it must be paid by the guarantor.

Current market choice for guarantor lenders is low. The eligibility service will also provide results for other types of loans. Ensure you carefully review your results and fully understand the terms and conditions of any loan before proceeding.

For free debt advice, contact Step Change, Citizens Advice or National Debt Line. is a registered Trading Name of Monevo Limited which is an Appointed Representative of Quint Group Limited, and is entered on the Financial Services Register under reference number: 723672.  Quint Group Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference number: 669450.  Monevo Limited is registered in England and Wales (Company number 06511345). Registered office: Glasshouse, Alderley Park, Nether Alderley, Cheshire,SK10 4ZE.  Licensed by the Information Commissioners Office, (Registration number Z1498441).

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