Would you be a guarantor for a member of your family?

[mustang1]

Not even for my own kids automatically! They both seem pretty sensible and the oldest has just left home and started work so may soon find himself wanting to buy 'stuff' but I hope/expect they will follow my example and be prudent (which is not the same as tight!).

If they do ever ask to borrow money or require a guarantor then they will need to justify the need for this, and 'I want it' or 'It'll be really nice to have' just won't cut it.

Spot on.
(I should have mentioned my kids are pretty good with money, at least for now).

 

[gavroche]

I've guaranteed all my kids student digs rental agreements.

I'm leasing my daughters car, as she started her lease before she started her job after graduating, so technically had no income so couldn't get credit, she has a standing order into my account to cover the monthly lease cost.

Did you every have the conversation with grandson to ask why he has stopped?

I did and his answer was: " If I don't have it, I can't pay it."

 

[Drago]

Sounds like Grandson needs to be asking himself as to why he doesnt have it.

 

[Dolorous Edd]

I did and his answer was: " If I don't have it, I can't pay it."

I know he is your grandson and all, but that does seem a rather disrespectful thing to say.

 

[T4tomo]

I know he is your grandson and all, but that does seem a rather disrespectful thing to say.

...or a lack of forethought, in terms of thinking hr could repay £200 a month when he borrowed it and either worked out he couldnt or his circumstances changed...

 

[slowmotion]

Like others, I have an aversion to debt. Fortunately, so has our daughter.

 

[I like Skol]

...or a lack of forethought, in terms of thinking hr could repay £200 a month when he borrowed it and either worked out he couldnt or his circumstances changed...

Exactly. What was he going to do if it was the bank/loan shark he was unable to pay, presumably let good old grandad pick up the bill?

 

[jowwy]

Simple answer - NO

 

[HMS_Dave]

No and never. Credit history can be rebuilt by doing things right. So, if one requires a guarantor, they perhaps should improve their credit files before considering more debt, if you must. For those requiring a guarantor for housing say, many councils run a guarantor scheme in this capacity and is probably a better option.

 

[Arrowfoot]

The fastest way to fray or break relationships is to act as guarantor or extend a loan. it will scar your impression of that person for life.

I have no issues with kids who are yet to be adults seeking help with students digs or a car for work. Thats a parental responsibility of raising kids. Anything outside is you are not helping the person in anyway.

 

[figbat]

If I am being asked to underwrite a loan that carries the risk of me having to pay it all out anyway then I would probably take the same approach as @gavroche and loan the money myself. One possible down side of this is that the borrower does not gain any credit history benefit, although if they are likely to default then they also save themselves the risk of a down-rating and CCJ.

 

[gbb]

Whatever happened to living within your means and only buying what you can afford?

I have used debt, as do most people, but this has been minimal. A mortgage is the main one, but kept this conservative to try and keep payments and period down. Also used sizeable personal loans to buy vehicles for business use when I was operating as a sole trader, but this was only after several years of trading and confidence in my ability to service the loans.
Other than this it has, from memory, been restricted to short term interest free credit where the money has been sat in my bank account anyway.

The benefit of this financial lifestyle is that throughout my life I have kept more of my earnings for myself rather than continually paying a slice of interest to the loan companies and as a result my money has gone further and the cumulative effect is actually quite significant in the long term.

Perhaps more people should try this approach?

If only more people realised. We married young, didnt have a pot to pee in, fought and occasionally struggled to swim but always fought to save, to reduce cost, plan ahead, budget....its boring but really really pays dividends later.
We never earned big money but own our own modest house and could live off savings if needed for 2 years perhaps.

In answer to OP....no, probably because we did it the right way.

 

[Beebo]

I’ve heard some horror stories.
The worst I heard was an elderly lady who acted as guarantor for their neighbour who they had known for years.
The debt was about £5k, the neighbour moved house without a forwarding address and the elderly lady got lumbered.

Another one was a lady who had an insurance claim refused because of a CCJ on someone else’s debt.

 

[HarryTheDog]

I signed as guarantor on my sons flat lease agreament just last month. Now you probably may think me mad, as the reason he has to have a guarantor is the amount of debt he put himself in ( around 4 years ago now) . 6 years ago I dug him out of debt ( gave him the money for a fresh start, gave his sister a equal amount to be fair to her ) only for him to do t all over again. I refuse to sort his debt now but if I was not his guarantor he would be stuck under my roof till god knows when,
He moved back in with me 3 months ago ( thrown out if his girlfriends parents house for a being a pain in the arse )and basically drove me up the wall, he may be 28 but immediately reverted to a 12 year old ( usual stuff cant empty a bin, change a toilet roll etc )

Funnily I visited his flat and he is very house proud where everything has to be in the right place and cleans every bit of mess as he goes along, under my roof he put everything all over the place and I had to nag him continually to clean up.
Frankly I would pay his rent just so he does not come back.

 

[BoldonLad]

No way for anyone but immediate family (ie children, possibly, under extreme circumstances, Brothers/sisters).

Even then, it would very much depend on why they needed the loan, what it was for, and, their financial record.

I have, in the past, been more generous/soft (depending on your point of view), with Son No2, and Daughter No 4. In both cases, financial ineptness resulted. I became part of the problem rather than part of the solution.

Since that experience I have been much stringent in enforcing care with MY money. This has worked with daughter No 4, she is now financially. sensible, Son No 2 gets no loans, because he is still financial incompetent.