Guarantor My Loan

Guarantor My Loan: guarantor loans and peer-to-peer platform in the UK

Guarantor My Loan presents itself as a peer-to-peer platform that connects borrowers and lenders and specialises in guarantor loans. The company defines itself as a direct lender that charges no upfront fees and allows early repayment without penalty. Its activity is aimed at UK residents and combines the granting of guarantor loans with attracting investors to fund those loans.

Guarantor loans for borrowers

The entity offers guarantor loans of up to £12,500 and terms of up to five years. The advertised representative rate is 49.9% APR fixed. The representative example on the site corresponds to a £5,000 loan over 36 months, with a monthly payment of £243.98, interest at 17% per year fixed and a service fee of 24.17% per year fixed; the total amount repayable is £8,783.28. Applications are made online and, according to the website, the process takes about five minutes. The company states that it does not apply upfront fees and that the borrower can repay early at any time without penalty.

Requirements to apply for a loan

To be able to apply for a loan with Guarantor My Loan you must reside in the UK or have the right to reside in the country throughout the loan duration; be employed, self-employed, in receipt of a pension or certain benefits; be at least 18 years old and no older than 75; and not be in an IVA, a Debt Management Plan or declared bankrupt. The company notes that you do not need a guarantor at the time of applying for the loan, but you must have a suitable one before it is approved.

The guarantor and the approval process

The guarantor can be a friend, a colleague or a family member, and must have a good credit history, be over 21 years old, be able to take over the repayments if the borrower does not make them and not be the applicant's partner or spouse. The process described consists of four steps: online application, finding a guarantor, a phone call to both parties to check affordability and disbursement of the money through the guarantor once the loan is approved. The company states that the money may be available the same day, depending on the circumstances.

Investment for lenders

Guarantor My Loan also attracts investors who fund loans to selected borrowers who have a personal guarantor. The minimum investment indicated is £10,000 and the term is five years, with an expected return of between 8% and 10%. The platform warns that capital is at risk and is not covered by the Financial Services Compensation Scheme (FSCS). It also offers two three-year investment products with 10% monthly interest and an expected return of 8% to 10%: an income product, with interest and capital repaid monthly, and a term product, with monthly interest and capital repaid at the end of the term. In both cases it warns that capital is at risk and is not covered by the FSCS.

Regulatory and risk warnings

The site includes warnings about the high-risk nature of this type of investment according to the Financial Conduct Authority (FCA). It warns that peer-to-peer loans are often made to borrowers who cannot obtain financing from traditional lenders, so they have a higher risk of default; that the advertised rates of return are not guaranteed; that the money may not be recovered quickly; and that the platform could fail, which would make it difficult to recover funds. It also states that investments may be held in an Innovative Finance ISA (IFISA), which does not reduce risk or protect against losses, it only means that any potential gains from the investment will be tax free. The FSCS does not cover investments in P2P loans, and the Financial Ombudsman Service (FOS) does not cover poor investment performance, although it may consider complaints against FCA-regulated platforms. The company refers to the public services Money Advice Service and MoneyHelper for free and impartial financial advice.

Customer reviews and general operation

The site shows testimonials from borrowers highlighting the personalised service, the speed of the process and communication with underwriters, and indicates a five-star rating given by customers. The company presents itself as an option for people with a poor credit history or with county court judgments (CCJ), and mentions the possibility of obtaining cashback at the end of the loan. Guarantor My Loan operates as a peer-to-peer platform with no upfront fees and flexibility for early repayment.