Guarantor loans became significantly harder to find after several of the UK's largest providers left the market between 2020 and 2023. They still exist, but the choice of lender is much narrower than it was.
This article explains what happened, where the market stands now, and what options may be worth considering if you are looking for this type of borrowing.
This article provides general information only. It is not financial advice and does not take your personal circumstances into account. If you are unsure which type of borrowing suits your situation, it can help to speak to a free, impartial service such as MoneyHelper.
Are guarantor loans still available?
Yes, but the market contracted sharply during the early-to-mid 2020s. Several major lenders stopped trading, entered administration, or became subject to large-scale redress schemes. The result is that fewer FCA-authorised lenders now offer guarantor loans than before 2020. Some still do. Availability and eligibility criteria vary by lender, and approval is never certain.
What happened to the guarantor loan market?
The guarantor loan sector grew rapidly in the 2010s. It was used mainly by borrowers with thin or poor credit histories who needed a creditworthy friend or family member to co-sign and take on liability for the debt if repayments were missed.
From around 2020 onwards, several forces combined to shrink the market.
Regulatory pressure on high-cost credit. The FCA increased its scrutiny of high-cost credit lenders, including those offering guarantor loans, as part of its broader high-cost credit review published in 2018 and subsequent supervisory work. Firms faced stricter affordability requirements and were expected to demonstrate that borrowers could genuinely repay without hardship.
Unaffordability complaints and redress. A significant number of customers complained that guarantor loans had been mis-sold because proper affordability checks were not carried out. The Financial Ombudsman Service reported uphold rates for guarantor loan complaints that were materially higher than the cross-sector average during 2021 and 2022 (FOS Annual Reports 2021/22 and 2022/23). Several lenders faced large redress liabilities that made the business model unworkable.
High-profile lender exits. Amigo Loans, at one point the UK's largest guarantor lender, ceased offering new loans in 2020 and subsequently entered a court-approved scheme of arrangement to handle redress claims, sanctioned by the High Court in May 2022. The company entered administration in February 2024 after the scheme concluded. TFS Loans entered administration in October 2022. George Banco, which had operated as part of the Non-Standard Finance group, also exited the market following that group's financial difficulties. These three names represented a substantial portion of the sector's capacity.
The combined effect is that the active lender pool is smaller today. Some smaller, specialist lenders and credit brokers still facilitate guarantor loans, but the product is no longer as widely marketed as it once was.
Who still offers guarantor loans?
The product still exists. 1Plus1 Loans (FCA authorisation number 673612) is one example of an FCA-authorised lender that was actively offering guarantor loans at the time this article was last reviewed. Regulated broker platforms such as Loans Warehouse also list guarantor loan products from a panel of authorised lenders. Representative APRs on remaining guarantor loan products have typically ranged from around 39.9% to 49.9% in recent years, though rates vary by lender and individual circumstances. You should verify current rates and availability directly with any lender or broker before applying.
If you have a poor credit history and a creditworthy guarantor willing to support the application, it may be worth checking whether you qualify through an FCA-authorised lender or a regulated broker.
A few things are worth bearing in mind.
Check the lender's FCA authorisation. Any firm offering credit in the UK must be authorised by the FCA. The FCA Register at fca.org.uk/register lets you confirm whether a lender or broker is authorised. Using an unauthorised firm is a significant risk.
Use a soft-search comparison first. Some brokers and comparison services offer a soft-search eligibility check, which does not leave a mark on your credit file. This can give an indication of what may be available before you make a full application.
Affordability applies to both parties. Lenders are required to check that both the borrower and the guarantor can afford the loan. If the borrower misses payments, the guarantor becomes liable. This is not a technicality; it is the central mechanism of the product, and it can affect the guarantor's own finances and credit file.
Rates can be high. Guarantor loans are typically aimed at higher-risk borrowers. The APR offered may be substantially above that available on mainstream unsecured personal loans. Comparing the total amount repayable across different options can give a clearer picture of cost.
What alternatives are worth considering?
If guarantor loans are unavailable or unsuitable, there are other options that may be relevant depending on your circumstances.
Credit unions. Credit unions are member-owned financial co-operatives regulated by the FCA and the Prudential Regulation Authority. Some offer affordable personal loans to members, including those with limited credit histories. Find your nearest credit union at findyourcreditunion.co.uk.
Personal loans from mainstream lenders. If your credit score has improved, or if the amount you need is modest, some mainstream banks and building societies may consider an application. Eligibility checks vary.
Secured loans. If you own a home, a secured loan uses property as collateral. Rates can be lower than unsecured alternatives, but the risk is significantly higher. Your home may be repossessed if you do not keep up repayments on a loan or other debt secured on it. This option is only relevant for homeowners and should be considered carefully.
Debt consolidation. If the reason you are considering a guarantor loan is to manage existing debts, it may be worth exploring a debt consolidation loan or speaking to a free debt advice service first. See our debt consolidation guide for more on how these products work and what to watch out for.
What to check before applying
Before making any application, a few checks can help:
- Confirm the lender or broker is on the FCA Register.
- Check whether an eligibility search uses a soft or hard credit check (a hard check leaves a footprint on your credit file).
- Read the full loan agreement, particularly the clauses that explain what happens if you miss a payment and when the lender can pursue the guarantor.
- Discuss the arrangement openly with your guarantor. They are taking on a real financial obligation and may need to seek their own independent advice.
MoneyHelper offers free, impartial guidance on borrowing options and can help you think through whether a guarantor loan is the right route, or whether another option suits your situation better.
MoneyHelper: 0800 138 7777 (free to call, available Monday to Friday)
Frequently asked questions
How easy is it to find a guarantor loan in the UK right now? The market shrank significantly after several large lenders exited between 2020 and 2023. Fewer active lenders now offer guarantor loans than before 2020. A useful first step is to search FCA-authorised lenders or use a regulated broker to check current availability.
Why did so many guarantor loan lenders close? A combination of factors contributed: rising unaffordability complaints, FCA supervisory pressure on high-cost credit, and large redress liabilities forced several lenders to stop trading or enter administration. Amigo Loans, TFS Loans and George Banco were among the most prominent exits.
Can I still get a guarantor loan with bad credit? Some lenders still offer guarantor loans to borrowers with poor credit histories. Approval is never certain and depends on the lender's own checks, the strength of the guarantor's credit profile, and affordability assessments for both parties. Comparing options through a soft-search broker can help.
What are the main alternatives to a guarantor loan? Options worth considering include credit unions, personal loans from mainstream lenders, secured loans (if you own a home), and debt consolidation. Each carries different risks and costs. MoneyHelper (0800 138 7777) can help you compare your options free of charge.
Does a guarantor loan affect the guarantor's credit file? It can. The loan may appear on both the borrower's and the guarantor's credit files once active. Missed payments by the borrower can affect the guarantor's credit score and their ability to borrow separately. Both parties should understand this before proceeding.
Are guarantor loans regulated in the UK? Yes. Any lender offering guarantor loans in the UK must be authorised and regulated by the FCA. You can check a lender's status on the FCA Register at fca.org.uk/register before applying.
Sources and further reading
- Financial Conduct Authority (FCA), High-Cost Credit Review, 2018: fca.org.uk
- Financial Ombudsman Service, Annual Reports 2021/22 and 2022/23: financial-ombudsman.org.uk
- Amigo Loans scheme of arrangement, High Court sanction May 2022 (case reference CR-2021-001538)
- MoneyHelper: moneyhelper.org.uk
- For the full guide to guarantor loans, see our Guarantor Loans guide.
- Are guarantor loans still available in the UK?
Yes, but the market shrank significantly after several large lenders exited between 2020 and 2023. Fewer active lenders now offer guarantor loans than before 2020. A useful first step is to search FCA-authorised lenders or use a regulated broker to check current availability.
- Why did so many guarantor loan lenders close?
A combination of factors contributed: rising unaffordability complaints, FCA supervisory pressure on high-cost credit, and large redress liabilities forced several lenders to stop trading or enter administration. Amigo Loans, TFS Loans and George Banco were among the most prominent exits.
- Can I still get a guarantor loan with bad credit?
Some lenders still offer guarantor loans to borrowers with poor credit histories. Approval is never certain and depends on the lender's own checks, the strength of the guarantor's credit profile, and affordability assessments for both parties. Comparing options through a soft-search broker can help.
- What are the main alternatives to a guarantor loan?
Options worth considering include credit unions, personal loans from mainstream lenders, secured loans (if you own a home), and debt consolidation. Each carries different risks and costs. MoneyHelper (0800 138 7777) can help you compare your options free of charge.
- Does a guarantor loan affect the guarantor's credit file?
It can. The loan may appear on both the borrower's and the guarantor's credit files once active. Missed payments by the borrower can affect the guarantor's credit score and their ability to borrow separately. Both parties should understand this before proceeding.
- Are guarantor loans regulated in the UK?
Yes. Any lender offering guarantor loans in the UK must be authorised and regulated by the Financial Conduct Authority (FCA). You can check a lender's status on the FCA Register at fca.org.uk/register before applying.