How to create a plan that will persuade a guarantor

Last post: Sep 25, 2018

Create a financial plan which shows your prospective guarantor that you’re able to take responsibility for your loan. These helpful tips will help you present your finances in a clear, convincing way.

 Sometimes arranging your guarantor is as simple as asking a loved one for help. Sometimes would-be guarantors require a little more persuading. That's because, if you're unable to meet your repayments, your guarantor will be responsible for paying off your debt.

Although you may know that you will be perfectly able to meet your repayments, your potential guarantor deserves to be reassured that they will not become responsible for what you owe. Many family members will simply take you at your word but, if friends or family want more information, they absolutely deserve to have the figures they need to make the right decision.

So, without further ado, we've created a quick guide to presenting your financial plan to a would-be guarantor. Even if your guarantor doesn't want to learn about your finances, creating this kind of plan is very helpful for keeping you on top of your own finances.

1. Set up a spreadsheet
Choose whichever spreadsheet software you feel comfortable with. Microsoft Excel is a very common choice. We like Google Sheets, because they're shareable.

2. List your monthly income and outgoings
Create categories along the top of your spreadsheet. A good sequence could be:

  • Column 1: Date
  • Column 2: Description of income or expense
  • Column 3: Income amount
  • Column 4: Expense amount

Whenever you receive money, enter the date, details of the income and list the income amount in the income column. Whenever you spend money, enter the date, details and amount in the expense column. This will give your possible guarantor a clear picture of how much you're earning and spending.

3. Provide proof
To prove you're not simply listing random numbers, you may wish to share your regular payslip with your potential guarantor. You may also want to share around 2-3 months of bank statements so they can corroborate what you're telling them. These statements can be downloaded via online banking accounts.

4. Outline your budget
If your outgoings exceed your income – which may make repaying a guarantor loan difficult – you'll need to demonstrate how you'll make space in your budget to pa it back. In a new spreadsheet section list the areas in which you will be making savings and how this will cover your repayments.

Arrange a guarantor loan with support from our experts. Contact our team to explore your best borrowing options today.