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A guarantor is someone who agrees to take responsibility for a loan if the primary borrower fails to make payments. Guarantors are often required when the borrower has a steady income but poor credit history, which might otherwise prevent them from qualifying for a loan.
Who Can Be a Loan Guarantor?
While guarantors are typically close friends or family members due to the trust involved, anyone who meets the lender’s criteria can act as a guarantor. Common requirements include:
- Residency: Must have a Canadian address and meet any minimum residency duration
- Age: Must be at least the age of majority in their province or territory
- Credit Score: Typically 650 or higher
- Income: Must have a stable and sufficient income to support the loan if needed
