Guarantor

A guarantor promises to repay a debt if the borrower cannot. A single signature converts someone else's debt into your own.

The weight varies by type. With a simple guarantee the lender must pursue the borrower first; with a joint guarantee they can demand the full amount from the guarantor directly.

It affects your credit immediately. The guaranteed amount counts as your debt, reducing your own borrowing capacity by that much — before anything has gone wrong at all.

The hardest part is that relationships make refusal difficult. But guaranteeing is for someone who can afford to repay, not for someone who merely wants to help.

When asked, the test is whether you could simply give that amount away. If not, the principle is to decline the guarantee. Being called on to pay is not rare. If you have already guaranteed a loan, check its repayment status regularly. People often learn of arrears far too late.