guarantor loans for bad credit
guarantor loans for bad credit

Guarantor Loans

  • High acceptance rate for bad credit
  • Easy application process
  • Best alternatives to guarantor loans
  • Same-day approval decisions
  • Funding within 1 business day
Written by Michael Lefler | Reviewed by Latoria Williams

Advertiser Disclaimer


1F Cash Advance is a financial platform that doesn’t offer loans. We connect you to potential lenders but don’t promise you'll get approved for a loan. The terms, rates, and fees may be discussed with the lender you were approved with. We recommend getting advice from a financial expert about dealing with money struggles without risky loans. For more information, read our full Legal Disclaimer.

Advertiser Disclaimer


1F Cash Advance is a financial platform that doesn’t offer loans. We connect you to potential lenders but don’t promise you'll get approved for a loan. The terms, rates, and fees may be discussed with the lender you were approved with. We recommend getting advice from a financial expert about dealing with money struggles without risky loans. For more information, read our full Legal Disclaimer.

Bad credit borrowers can add a guarantor to their loan application to improve their approval chances or get more favorable loan terms. But there are several drawbacks and risks for both parties that require thorough consideration before the loan process starts. At 1F Cash Advance, you can get safer alternatives that don’t require any repayment guarantee.

What Is a Guarantor Loan?

A guarantor loan is a form of unsecured borrowing that involves adding a third party to your application. This individual provides an extra repayment guarantee in case a primary borrower defaults on the agreement. Simply put, a guarantor is a person who is legally responsible for making monthly loan payments if you won’t be able to do so.

People turn to guarantor loans when they have credit issues and can’t meet regular personal loan requirements. A guarantor makes the deal look less risky for lenders, allowing them to offer more reasonable loan terms or at least consider an applicant who would otherwise be rejected.

How Do Guarantor Loans Work?

Guarantor loans work similarly to regular personal loans but with two applicants instead of one. A primary borrower applies for a loan with their family member, partner, or friend. Both parties provide all the required documents and sign an agreement in case of approval. Such a debt will also appear in a guarantor’s credit report.

Then, a borrower receives a lump-sum deposit and starts to make payments in accordance with the repayment schedule. Besides the loan principal, an interest rate is also applied. For good credit borrowers, an APR can be anywhere from 5.99% to 35.99%. People with bad credit can expect an APR of 40% to 50%.

The amount you can borrow is determined based on your and a guarantor’s incomes and may be up to $100,000. The repayment period ranges from 12 to 84 months. If you become unable to make your loan payments, a guarantor takes on this responsibility. Still, they have no legal right to use the loaned money or share ownership of assets purchased with its help.

Who Can Be a Guarantor for a Loan?

Most people ask their family members, spouses, or close friends to back their loan agreements. When it comes to business loans, a business partner may also become a guarantor. Regardless of who you choose for this role, they need to meet a few mandatory criteria.

Minimum Age Requirements

A guarantor must be at least 18 years old. Some lenders may even set a higher minimum of 21 or 22. A government-issued ID or a driver’s license will serve as age and identity confirmation.

Proof of Residentship

Lenders typically ask for guarantors who are legal US citizens or permanent residents. Such an individual will need to provide supporting documents in the form of mortgage or rental agreement or utility bills;

Stable Income

A guarantor needs to be solvent in case of a primary borrower’s default. Therefore, their income will be closely reviewed, too. All the guarantor’s personal debts will also be taken into account.

Credit Score

If a lender has any minimum credit score requirements, a guarantor must also meet them, along with a primary borrower. More than that, a guarantee typically needs to have a higher FICO score to secure the loan.

Quick tip:

No matter the lender requirements, aim for a guarantor with good or excellent credit, strong employment history, and higher-than-yours income to make your application look trustworthy.

Types of Guarantors

Speaking about lending, there are two main types of guarantors:

  • Limited guarantors. Such an individual has a set limit that a lender can make them pay in case of a primary borrower’s default. This limit is usually an agreed-upon sum expressed in dollars;
  • Unlimited guarantors. Unlimited guarantees will be responsible for repaying the entire outstanding loan balance, plus interest and legal fees. If they don’t make payments either, a lender can come after their physical property.

However, this term is not only used in regard to personal loans. There are lease guarantors who co-sign a lease agreement to vouch for the renter. A guarantor may also be a certifier who confirms that they know a job or passport applicant, and the information provided by them is accurate. In both cases, guarantors don’t take on financial responsibility.

Pros and Cons of Loans with a Guarantor

Just like with any other borrowing option, loans with a guarantor have their strong and weak points. Give them a closer look to better understand all the benefits and risks.


  • Higher approval chances. If you have a bad credit history and can’t qualify for a regular personal loan, adding a guarantor can help you look more reliable for lenders;
  • Better loan terms. You can get a lower interest rate, a higher loan amount, and more repayment flexibility when you bring a guarantor with stable income and good credit;
  • Credit score improvement. If repaid on time, such a loan can boost your FICO rating, allowing you to qualify for more favorable loans in the future.


  • It can hurt your relationships. If you fail to repay the loan, your guarantor will become responsible for covering monthly payments. This may add tension to your relationship;
  • Credit and financial implications. As a guarantor loan is a long-term commitment, a co-signer may face financial obligations they can’t afford at the moment. Besides financial strain, it can also affect the credit scores of both parties involved;
  • No ownership. Even if a guarantor makes your loan monthly payments, it has no legal right to claim money borrowed or property purchased;
  • Price and availability. These loans tend to be more expensive than conventional personal loans. They are also offered by fewer lenders, making it more difficult to find a suitable option.

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Guarantor vs. Co-Signer vs. Co-borrower: What’s the Difference?

A guarantor and a co-signer are very similar. Both of them secure a loan agreement, allowing a primary borrower to qualify for a loan or get more favorable terms. They also can’t access the money borrowed and don’t share ownership of assets purchased using the loan funds.

However, the difference lies in when they become responsible for the borrower’s debt. While a co-signer is responsible for every missed payment, a guarantor only comes into play if the borrower falls into total default.

There’s also a co-borrower who becomes a part of a joint application and shares repayment responsibility equally. Co-borrowers make loan payments from the very beginning and have access to the funds borrowed or the property purchased along with a primary borrower.

1F Cash Advance Alternatives to Loans with a Guarantor for Bad Credit

Despite all the advantages, guarantor loans may not work for everyone. If you’re looking for an alternative option, consider getting a loan through 1F Cash Advance instead. Our products provide a quick fix for borrowers with various credit backgrounds.

We partner with multiple lenders that offer unsecured loans with competitive fixed rates and next-day or same-day funding. You’re welcome to apply online in just 5 minutes so we can help you find the right offer for your unique situation.

Here are loans you can get via 1F Cash Advance.

Cash Advance Loans

These are small, short-term loans designed to cover unforeseen expenses and minor emergencies. You can borrow up to $1,000, depending on your state and income, and repay the funds after your next paycheck arrives. As there are no hard credit checks involved, the approval decision is made in a matter of minutes. If approved, the funds will be deposited into your bank account within 1 business day.

Just note that these loans usually have higher-than-average costs. Borrowers typically pay between $10 and $30 for each $100 borrowed, which often results in APRs of over 400%.

Installment Loans

Installment loans are small personal loans for bad credit that allow you to split the overall borrowing cost by a few months or years. You will get the full loan amount on hand and gradually repay the money in equal monthly installments. The repayment period is between 2 and 24 months, while the maximum loan amount is $5,000.

Installment loan APRs are usually between 16% and 100%. Although these loans offer more flexibility, they may also result in more overpayment over the loan life. You need to choose an efficient repayment period with both affordable monthly payments and a reasonable total loan cost.

Other Options to Consider

If the options mentioned above can’t meet your current needs, here are a few more alternatives you can turn to:

  • Secured loans. A secured loan requires you to provide collateral backing in the form of your valuable asset. This repayment guarantee will help you get favorable loan terms without any third party involved. However, you risk losing your property if you fail to repay the funds on time;
  • Family loans. Your loved ones may want to help you overcome financial challenges on your terms and without charging you any extra fees. Just make sure to discuss everything before entering the deal and stick to the agreement;
  • Loans from credit unions. Credit unions are nonprofit financial institutions, so they often offer lower loan rates and more lenient requirements. Still, you need to be a member of one to qualify for its deals;
  • Peer-to-peer loans. You can find flexible loan offers from individual investors on P2P lending platforms. They bypass traditional financial institutions and are often tolerant of borrowers with credit issues;
  • Lines of credit. Several credit lines are available to borrowers with less-than-perfect scores without any guarantor or collateral required. They allow you to use the money within a certain limit, repay it within a billing cycle, and access it again when needed. You will only pay interest on the amount you actually use.

No matter what loan option you’re going to choose, keep in mind that responsibility is key. Only borrow what you can afford and make sure the terms are reasonable. At 1F Cash Advance, we can help you find a suitable loan that meets your needs.


How Much Do Guarantor Loans Cost?

Guarantor loan APRs usually range between 5.99% and 35.99%. Bad credit options may come with higher APRs of about 40% or 50%. Your particular loan price will depend on a lender, your state, and credit scores of both parties involved in the borrowing process.

What Should I Do If I Can't Repay a Loan on Time?

If it's a guarantor loan, it's important to talk to a guarantor as soon as possible. As your debt payment obligations will pass to them, it's important to give them time to prepare. You should also contact a lender and come to an arrangement.

How Much Can I Borrow with a Guarantor?

Guarantor loan amounts usually range from $1,000 to $100,000. The exact sum available to you depends on several factors, including the lender's limits, your and a guarantor's income, and credit scores.

What Should I Look for in a Guarantor?

In an ideal scenario, a guarantor needs to have a stable income high enough to cover potential loan payments, a good to excellent credit score, and a debt-to-income ratio of no more than 43%.

What If a Guarantor Can't Make My Loan Payments?

As a guarantor is liable for the debt under certain conditions, non-payment will be considered a violation of the loan terms. This means that a guarantor can face extra fees, assets repossession, or even be taken to court.

Does Being a Guarantor Have Any Impact on Your Credit Score?

A guarantor's rating will remain unaffected if a primary borrower manages their debt payment obligations properly. If a primary borrower defaults and a guarantor keeps up with the repayment as agreed, their FICO rating may increase. However, late or missed payments will result in a credit score drop.

Are There Loans for Bad Credit with No Guarantor?

Sure, there are many options with no extra guarantee or security available to people with bad credit. You can also get bad credit loans through 1F Cash Advance by filling out a simple application form.

Does 1F Cash Advance Perform Credit Checks?

Loans offered through 1F Cash Advance typically involve a soft credit check only. Our affiliated partners don't make hard inquiries via major credit bureaus, meaning that your credit score won't be affected.