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A guarantor is someone who backs up someone taking out a loan and agrees to take responsibility for the loan payments in the event the borrower defaults on the loan. Guarantors are usually required if the primary borrower has credit issues, but still has the income needed to support loan payments. Bad credit can stand in the way of a borrower securing a loan, despite their income.
Who Can Be A Loan Guarantor?
Most guarantors are family members or friends, simply because of the close relationship involved. That said, anyone can be a guarantor, as long as they meet the lender’s requirements. This may include the following:
- Residency- Have a Canadian address for a certain period of time
- Age- Be the age of majority
- Credit score- at least 650 or higher
- Income- Earn sufficient and stable income
