No Guarantor Needed - We Promise
Why we could never become involved in Guaranteed Loans.
Friendships broken and lost when Guarantors are forced to step in and make make payments on the borrowers behalf.
Guarantor loans work well for mortgages and cars, but not for short-term loans.
Representative Example: Amount of credit: £1500 for 11 months at £169.69 per month. Total repayment of £1866.59. Interest: £366.59 Interest rate: 46% pa (fixed). APR rates range from 22.3% APR to 112.5%. Credit broker not a lender. Warning: Late repayment can cause you serious money problems. For help visit Money Helper
Quick Loans With No Guarantor
We won't require you to provide a guarantor for any type of loan product on this site. The loans offered here are unsecured. We are not comfortable recommending guarantor relationships to our customers. When these things go wrong, they have the ability to break up families just when that help is needed the most.
What is a Guarantor loan?
Guarantor loans involve a friend or family member co-signing the loan agreement and agreeing to cover any missed payments due to financial problems. In some cases, the guarantor may be required to take over the repayments if the borrower passes away. While guarantor loans may sound negative, they can work well for some people in certain circumstances if used correctly.
Background to Guarantor Loans
Guarantor loans have been around for several years, infact many Kings and Queens have used them over the centuries. For the mainstream public here in the UK, their origins traced back to at least the 1990s. They were initially common in car finance arrangements, where parents were often asked to act as guarantors for their children to secure approval.
In the last decade, guarantor loans have become more mainstream, extending to various credit products, including mortgages and unsecured loans. Currently, they make up approximately 20% of the unsecured non-bank lending market in the UK.
Downsides to Guarantor Loans
Guarantor loans pose significant challenges as they are considered "bankruptcy proof." Even if the borrower declares bankruptcy, the responsibility for the loan passes on to the guarantor, leading to potential conflicts and strained relationships that almost always end up in friends and family not talking to each other for a long time.
Given these moral hazards, Quick Loans does not recommend guarantor loans to its customers. The company believes that loans should be a direct agreement between the lender and the borrower, with the lender assuming the risk involved in lending.
While guarantor loans may become more prevalent as lenders seek to minimize risk, We emphasise that we will not engage in such loan products. The site aims to provide loans based on a direct relationship between the borrower and the lender, without the complexities associated with guarantors.
Quick Loans strongly advises its customers to avoid guarantor loans, emphasising that they may not be more cost-effective or advantageous despite potentially higher approval rates.
There Is No Way Out Of A Guarantor Loan
Unfortunately you and your guarantor are locked into the agreement. Only by paying the loan off will your guarantor be released from the agreement. There really is no get out clause for a guarantor loan. Not even going bankrupt will release your guarantor.
What Happened To Amigo Loans?
Amigo Loans, once the largest player in the guarantor loans market, faced significant challenges leading to the cessation of lending activities. Established in 2005, Amigo Loans ceased lending in March 2020 after facing accusations from the Financial Conduct Authority (FCA) of putting consumers at high risk of harm. They also faced claims of mis-selling from histoci borrowers. These borrowers would eventually receive 17p in the £1 as compensation.
Despite attempts to resume lending, Amigo struggled to secure sufficient funding from investors and once again stopped lending in March 2023. The business model, which generated high gross profits, was deemed unviable due to what the company and investors perceived as unfair regulations.
The FCA expressed concerns that one in four loans from Amigo resulted in the guarantor having to step in and make repayments on behalf of the named borrower. According to the FCA, this high rate posed a significant risk to consumers. However, it's important to note that three out of four borrowers were able to make repayments on time, indicating that a substantial portion of individuals might have been unfairly denied credit in their own name.
As of February 2024, there are no known guarantor unsecured loan services available in the UK, with all four providers having ceased trading. Nevertheless, guarantor options still exist in the car finance and mortgage sectors.
Amigo loans went into liquidation in March 2023, 200 staff were laid off and the company will see it's liquidation formally completed at some point in 2024.