Guarantor Personal Loans

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Last Updated: 11/03/2025
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A guarantor personal loan is a standard personal loan that uses a third party, known as a guarantor, to guarantee the payment of the loan. This arrangement can be useful for people who have difficulty securing a loan, such as those with a poor or limited credit history, and can help you maximise your borrowing power and secure lower interest rates.

If you're on the lookout for a personal loan and need a guarantor, we're here to help. Savvy is partnered with a range of trusted providers to help you find the best available deal for your needs. Get a quote with us today and we'll get to work on your loan application!

Why apply for a personal loan with Savvy?

Help from the experts

When you submit your application, one of our consultants will compare the best available options and walk you through the process.

Paperless applications

You don't need to worry about sifting through documents and visiting the post office, as they can all be submitted online.

Reputable lending partners

We've partnered with personal loan companies you can trust to ensure your comparison is a high-quality one.

What are the requirements for a guarantor?

Your guarantor must be someone in a stronger financial position who is willing to assure the payment of your loan. This means that if you default on your personal loan, they will take on repayments until it’s fully paid out. Typically your guarantor would be someone you have a close relationship with such as a family member or close friend. They will also have to meet certain criteria, such as:

  • Having a good credit history.
  • Earning a stable income that is enough to cover loan repayments should you default.
  • Being at least 18 years old.
  • Living in Australia as a citizen or permanent resident.

Your guarantor may also be asked to put up their assets, such as equity in their home or a vehicle, as part of this arrangement. However, full control of these will revert back to the guarantor at the conclusion of your loan.

It’s important to note that while your guarantor agrees to shoulder responsibility for your loan, that this only comes into effect if you fully default on your repayments. If you’re able to keep on top of things, as the vast majority of borrowers do, your guarantor won’t become involved in the loan’s payment at all.

What loan types can I use a guarantor for?

The types of loans you can apply for with a guarantor are the same as any other personal loan. There are two main types of personal loans to choose between: secured and unsecured. There are key differences between them, so it’s important to understand how they work before applying.

Unsecured personal loans

The most common type of personal loans, unsecured finance is available to anyone without the need for you or your guarantor to provide a valuable asset as collateral for the loan. Loan amounts are available from as little as $2,000 all the way up to $75,000, with your approved amount depending on what you can comfortably afford (although lenders may be willing to grant loans beyond your standard affordability with a guarantor).

Secured personal loans

Unlike unsecured loans, secured loans do require that either you or your guarantor put forward an asset as collateral for your loan. Because of the added security, the maximum borrowing power sits at $100,000 (with a minimum of $15,000) and interest is offered at a substantially lower rate than an equivalent loan without security. As such, these loans are useful for larger sums of money and for borrowers (and guarantors) who have eligible assets at their disposal and want to reduce the cost of their finance deal.

Is a guarantor personal loan the same as a joint loan?

No, a personal loan with a guarantor is not the same as a joint loan. A guarantor-backed personal loan is suitable when someone needs help qualifying for a loan but needs someone else to act as security. A joint loan, meanwhile, is a loan taken out with another borrower (co-borrower) who is all equally responsible. Here’s a breakdown of how the two arrangements differ:


Guarantor loan Joint loan
One person takes out a loan and the guarantor acts as security Two people take out the loan together.
The borrower is primarily responsible for repaying the loan. All borrowers are equally responsible for the loan repayments.
Primarily affects the borrower's credit, but can damage the guarantor's credit if the loan defaults. Affects the credit reports of all parties involved equally.
Often used to help those with a poor or limited credit history. Typically used when both parties need the loan.

Pros and cons of guarantor personal loans

Pros

  • Greater chance of approval

    Having a guarantor can increase your chances of loan approval, especially for borrowers with minimal credit history.

  • Better loan terms

    Lenders may offer lower interest rates and better terms due to the added security provided by your guarantor.

  • Opportunity to build credit

    Successfully repaying a guarantor loan can help improve your credit score.

Cons

  • Relationship risk

    Defaulting on your loan can strain your relationship with the guarantor, who becomes responsible for your loan payments.

  • Financial burden

    Your guarantor must be prepared to take on the financial burden of repaying the loan if you default, which can be a significant risk.

  • Credit impact on guarantor

    If you default and your guarantor has to step in, their credit score can be negatively impacted.

Types of personal loans

Personal loan repayment calculator

It’s important to have an idea of what different loans might cost you overall before you apply. Fortunately, Savvy’s personal loan repayment calculator is simple to use and tells you everything you need to know about how much different offers might add up to overall based on a variety of different factors.

$500
$200,000

Your estimated repayments

$98.62

Total interest paid: Total amount to pay:
$1233.43 $5,143.99

Apply for your personal loan online

  1. Complete our simple online application form

    First and foremost, you’ll need to fill out our quick and easy online form. Tell us about yourself, your finances, the loan you’re after and why you need it in just a few minutes.

  2. Compare your options with Savvy

    Once you’ve done this, you’ll be able to assess the products on offer from our partnered lenders. A member of our team will reach out to help you choose the best available offer.

  3. Send your documents and formally apply

    If you’re happy with one of the options available, you can go ahead and formally apply. We’ll handle this for you; simply send the required documents through our online portal and we’ll do the rest.

  4. Get approved and sign your contract

    We’ll let you know when you’re formally approved, which can happen in a matter of hours, and all you’ll need to do is sign your loan contract electronically to receive your funds as soon as the same day.

Personal loan eligibility and documentation

Eligibility

  • Age

    You must be at least 18 years of age

  • Residency

    You must be an Australian citizen or permanent resident (or, in some cases, an eligible visa holder)

  • Income

    You must be earning a stable income that meets your lender’s minimum threshold (this can start from as little as $20,000 per year)

  • Employment

    You must be employed on a permanent, casual or self-employed basis

  • Credit score

    You must meet your lender’s minimum requirements related to your credit score and not be bankrupt or under a Part IX debt agreement

  • Contact

    You must have an active phone number, email address and online bank account in your name

Documents

  • Personal information

    Your full name, date of birth, address and contact details

  • Photo ID

    Such as a driver's licence or passport

  • Payslips

    Your last two consecutive payslips (or your last tax return if you're self-employed)

  • Assets and liabilities

    Information about any assets you own (such as a car or house) and liabilities in your name (such as other loans)

  • Bank statements

    90 days of bank statements may be requested, but not always

Frequently asked questions about guarantor personal loans

Will a guarantor guarantee the success of my application?

No – even with a guarantor, lenders won’t guarantee approval on any personal loans that they offer. This is because they’re subject to responsible lending guidelines enshrined in Australian law which they must abide by, the most important of which dictates that they can’t green light a loan that they’re not sure you can repay.

For example, if your lender only felt you were capable of repaying a $15,000 loan but you asked for $30,000, they wouldn’t be able to approve you for that amount.

Does having a guarantor impact the growth of my credit score?

No – even if you have a guarantor on your loan, your credit score will appreciate at the same rate as it would if you were repaying the loan as the sole member of the agreement. Credit reporting agencies and lenders will look to your repayment history, which won’t reflect the presence of a guarantor if you don’t default and allow you to build your credit score as a result.

Will I be able to access 100% finance with a guarantor?

Yes – there’s no obligation for you to supply a deposit on any personal loans, regardless of whether you have a guarantor attached. As such, you can access 100% financing for whatever you need provided you can afford to make repayments.

Do all lenders offer guarantor personal loans?

No – not all lenders offer guarantor personal loans. It’s important to check whether a lender accepts guarantors before you apply to avoid unnecessary rejections, which could negatively impact your credit score. If you apply through Savvy, we can help you find lenders that offer guarantor loans and meet your specific needs, ensuring a smoother process.

Do I need to put down a deposit for a guarantor loan?

No – there’s no obligation for you to put down a deposit on any personal loans, regardless of whether you have a guarantor attached. As such, you can access 100% financing for whatever you need provided you can afford to make repayments. However, paying a deposit can boost your chances of approval.

Can I take my guarantor off my personal loan?

Yes – if your guarantor decides not to be involved in your personal loan, you can cancel it prior to receiving your funds or repaying the entire amount if you haven’t spent any yet. You may also be able to refinance to another personal loan product which doesn’t include a guarantor with a different lender during your term and pay your existing loan out early. You may incur fees for doing so, however.

Does a personal loan impact a guarantor’s credit file?

It can – the personal loan will show up on your credit file even if you aren’t involved in the repayments, which could (in theory) make it more difficult for you to get approved for other finance in the future. Additionally, if your borrower defaults on the loan and you’re unable to repay it, a default would go on your credit file and could severely damage your score.

Should I find a guarantor before I look for a loan?

Yes – there’s little point in starting an application for a personal loan if you need a guarantor but don’t have one. Having a guarantor early on also allows you to assess their eligibility and ensure they meet the lender’s requirements, helping you to avoid delays. Once your guarantor is confirmed, you can begin comparing loan options to find the best fit.

Can I get a guarantor personal loan as a student?

Yes – students can apply for a guarantor personal loan. A guarantor can strengthen your application, especially if you don’t have a substantial income or credit history as a student.

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