Best Guarantor Loans in Canada 2022

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by Enoch Omololu


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A guarantor loan is one way to get a personal loan if you have bad credit and are unable to access an unsecured loan on your own merits.

With a guarantor involved in your credit application, a lender has someone else to fall back on if you default on your debt repayment obligation.

What is a Guarantor?

A guarantor is someone who promises to repay a loan if a borrower is unable to do so.

Guarantors are often required when a person with a bad credit history or inadequate income applies for a loan.

The lender may ask them to find a creditworthy guarantor who co-signs the loan and pledges to repay it if the borrower defaults.

If both the borrower and guarantor are unable to repay a loan, the lender may hire a debt collector to recover monies owed from both parties.

Depending on the situation and amounts owed, their assets can also be seized if a court judge decides that.

Loan Guarantor Requirements and Rules in Canada

Guarantor lenders generally expect your guarantor to have a good credit rating and be able to pay off your loan if needed.

They should:

  • Be independent from you
  • Be at least 19 years of age
  • Be a Canadian citizen or resident
  • Have a good credit history
  • Not have trouble paying their bills i.e. have a decent income-to-debt ratio

Some guarantor lenders may also require that your guarantor have a home.

Best Guarantor Loans in Canada

Best Guarantor Loans in Canada

The only guarantor loan company in Canada is LendingMate. This company operates in Ontario and British Columbia.


If you need access to cash and do not qualify for a personal unsecured loan based on credit score, LendingMate can help.

It offers no credit check guarantor loans of up to $10,000 over a 36-60 month term.

The interest rate on this loan is 43% per annum and there are no other fees.

Given that 95% of borrowers are approved, a LendingMate loan is almost guaranteed to be approved if you have a suitable guarantor in place.

Pros of Guarantor Loans in Canada

Finding a guarantor could mean the difference between getting approved for a loan and having your application denied by a lender.

Even with a bad credit history or no credit at all, you can be approved for a guarantor loan.

Applying for guarantor loans is easily completed online and a company like LendingMate pays out the funds within 24 hours of accepting your guarantor.

Lastly, having a guarantor may help you qualify for a larger loan and at a lower interest than regular bad credit or payday loans.

Downsides of Guarantor Loans in Canada

If the borrower is unable to repay their debt, the guarantor becomes responsible for paying it.

This can severely damage their credit score and leave them struggling financially or even losing assets (such as a home).

Before guaranteeing a loan for anyone, make sure you trust them and consider the consequences should they default.

Also, if you decide you no longer want to be a guarantor for a loan, the loan has to be paid in full, plus accrued interest.

In essence, once you sign the documents to become a guarantor, you are liable until after it has been paid back.

Guarantor vs. Co-signer

A guarantor is not the same as a co-signer.

While a loan guarantor is only responsible for making payments when a borrower defaults, a co-signer co-owns the property e.g. home, car, or other assets, and carries the same responsibility as the borrower for making payments from day one.

For example, if you are a “co-signer” on a mortgage, your name will appear on the title and you co-own the property. You are also jointly responsible for making the monthly mortgage payments.

If you are a “guarantor” for a mortgage loan, you may be held liable for repaying it only after the lender has made reasonable efforts to get the borrower to settle their debt obligations.

Guarantor Loans Alternatives in Canada

You may be able to qualify for a loan without requiring a guarantor.

The two top platforms for bad credit loans are:

Loans Canada

This loan comparison platform can be used for finding secured, unsecured, and guarantor personal loans.

It has partnerships with a vast network of lenders who offer loans up to $50,000 and terms ranging from 4 to 60 months.

Loan interest rates also vary from 2% to 46.96% depending on your credit profile.

Visit Loans Canada.


LoanConnect calls itself “Canada’s Premier Personal Loan Search Engine”. You can use the platform to get loans up to $50,000 and the online application takes 5 minutes or less.

Loan rates vary from 5.75% to 46.95% and funds can be borrowed for up to 60 minutes.

For car loans, the APR ranges from 1.90% to 4.95%.

Visit LoanConnect.

Guarantor Loans FAQs

Can I get a guarantor loan with bad credit?

You may qualify for a guarantor loan with poor or bad credit. That said, the lender will only approve your loan if your guarantor has a good credit history.

What if I can’t find a guarantor?

If you can’t find a loan guarantor, you could opt for a bad credit loan, borrow from friends, carry a balance on your credit card, and get help from a credit counselor.

Where can I get loans without a credit check or a guarantor?

Visit your bank or apply online using platforms like Loans Canada and LoanConnect.

Does my guarantor need to have a home?

It may help your application if your guarantor has a home or property, but this may not be mandatory.

Does my guarantor have to be working?

No, they don’t need to have a job, but they must be able to show they have sufficient funds to repay the loan if you are unable.

Who can be a guarantor for a loan?

Someone who is the age of the majority in their province, who has sufficient income, and good credit history.

Why do I need a guarantor?

You may be required to provide a guarantor when applying for a loan because you have bad credit (or no credit history), a low income, or have trouble paying your bills.

What if my guarantor cannot pay?

The lender can take further actions including using the services of a debt collector and can take both the guarantor and borrower to court.


Best Guarantor Loans in Canada 2022

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

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