What is a guarantor?

What a guarantor does

A guarantor promises to cover a financial obligation if the main person, such as a tenant or borrower, does not pay. If payments are missed, the lender or landlord can ask the guarantor to step in.

Being a guarantor is a legal commitment, not just a favor. The guarantor is typically named in a contract and can be held responsible for the full amount owed.

Guarantors are most often asked for in three situations: renting a home, taking out a loan, and sometimes opening certain accounts. They give the lender or landlord added confidence that the payment will be made.

When you might need a guarantor

A guarantor is usually requested when someone does not yet have enough financial history or income on record to qualify on their own.

• ‍New to a country. People who have recently arrived may not have a local credit record yet, so a landlord may ask for a guarantor. Building that record takes time, as explained in how long does it take to build credit.‍
• Students and first-time renters. Those without a steady income or rental history may need a guarantor to sign a lease.‍
• Larger loans. Some lenders ask for a guarantor when the borrower's income or credit does not meet the requirement on its own.

What to consider before becoming a guarantor

Agreeing to be a guarantor is a serious responsibility, so it helps to understand the commitment fully.

Before signing, review exactly what you are guaranteeing, how much you could owe, and for how long the agreement lasts. Ask whether your responsibility ends when the contract does or continues beyond it.

Because a guarantor may be legally responsible for the debt, it can affect your own finances if the main person cannot pay. Consider whether you could comfortably cover the amount if you were asked to.

Supporting family across borders takes many forms, from co-signing to sending money when it is needed. MoneyGram helps people support loved ones in more than 200 countries and territories, backed by 85 years of trust. If your role also involves questions of residency and status, see nationality vs citizenship.

Common questions

What is the difference between a guarantor and a co-signer?

Both agree to be responsible for a debt, but the roles differ slightly. A co-signer usually shares responsibility from the start and may have equal access to what is borrowed. A guarantor typically steps in only if the main person fails to pay. The exact meaning can vary by contract and by country, so read the agreement carefully.

Does being a guarantor affect my credit?

It can. If the main person misses payments and you are asked to cover them, that responsibility can appear on your financial record and affect your credit. Even when payments are made on time, some lenders may consider the guarantee when assessing how much you can borrow.

Can a guarantor be removed from an agreement?

Sometimes, but not automatically. Some contracts allow a guarantor to be released once the main person meets certain conditions, such as a period of on-time payments. Others last for the full term. Check the agreement and ask the lender or landlord about the process before you sign.

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