Last post: Aug 10, 2017
Asking somebody to be your guarantor, whether it's a friend, a family member or even a colleague, can be tricky. You need to be 100% certain you can meet repayments and they need to be positive too. Presenting them with a clear budget could make all the difference.
If you can present your would-be guarantor with a clear plan for loan repayment which works sensibly within your current budget, you stand a much better chance of persuading them to sign on the dotted line.
Even if your guarantor knows you will be able to meet repayments, going to the effort of creating a proper budget will show them just how serious and responsible you are about the entire process. This can be very reassuring. The plan can even help you stick to your budget during the loan term.
But what should your budget include and how should you present your guarantor loan repayment plan to make it as convincing as possible? We've come up with some tips to help you get started...
1. Create your spreadsheet
Creating a spreadsheet is one of the easiest ways to put your budget down on paper. Microsoft Excel works just fine, while OpenOffice or LibreOffice Calc offer free alternatives to download. If you want to share your budget easily online, creating a Google Sheet is another good option.
2. Add income and outgoings
With your spreadsheet ready to go, start adding your income and your expenditure. Create a column for dates, a column for typical income and a column for typical expenses including rent, bills, petrol, any other repayments, average food costs and any other upcoming expenses. Add a total for income and a total for outgoings once complete. These figures should serve an as "example month" to show your guarantor that repayment is possible.
3. Demonstrate your repayment plan
With this information it's time to add another expense – the repayments on your guarantor loan. If your outgoings for your example month are higher than your income, you'll need to indicate how you're going to realistically cut back. i.e. by spending 15% less on food each month or by selling an asset like a car. If repayment still isn't possible, it's time to rethink using this finance product.
Have you used a guarantor loan in the past? How to you convince your guarantor to support you? We offer flexible guarantor loans up to £10,000 for clients who have struggled to access traditional finance. Find out more.
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