Some loan applications will be granted only if a suitable guarantor is available. If you are approached by someone to act as a guarantor for them, then please make sure you fully understand the commitment you are making. Essentially, you are signing a legal document confirming that if this person defaults on their loan, then you will take responsibility for it. We recommend that you take time, to consider long and hard as to whether you feel this person will keep up repayments, even if their circumstances change.
We have hundreds of cases where members have, without any issue, acted as guarantor for each other. Sadly however, we also have many cases where the guarantor has been left to pay off a loan taken out by someone else.
Your responsibilities as guarantor
- If the member fails to pay,YOU are liable to maintain regular repayments.
- If a top-up loan is required, you may be required to guarantee the additional loan under the new agreement.
- If at the end of the guaranteed period, the loan is in arrears, the Credit Union will ask YOU to pay the arrears.
- If the loan falls into arrears, you will be notified.
- If the member fails to make arrangements to repay this loan, the account will be sent to our solicitors for recovery. Please note that
YOU, as a Guarantor may also face court proceedings. - If you wish to take out a loan in your own account, this guarantee will be taken into account.
- You have the right to enquire about the loan during office hours.
Proposed guarantors have to complete a ‘Guarantor Application’ where they are required to disclose their financial information and agree to a credit check being carried out on them. Only when the proposed guarantor returns the ‘Guarantor Application’ and the loan application is approved subject to them acting as guarantor, can a loan be paid out.
Guarantors should be aware that they have to provide the following:
- 3 recent payslips or social welfare receipts
- 3 months current bank statements dated within the last 4 weeks
- Proof of address (current utility bill, bank or credit card statement)
- Proof of Identity (valid passport or driving licence)
- Self-employed (your most recent Tax Assessment)
