So, you’ve stumbled upon a place to rent of your dreams — spacious, sunlit, and in the perfect location.
But there’s a catch: your credit score resembles a rollercoaster ride.
Fear not!
Enter the lease guarantor, your trusty sidekick in the world of renting.
So what is a lease guarantor?
How can it help you obtain a place to rent?
And, if you’re a landlord looking to place tenants on your property, is a guarantor on a lease something you should consider?
Whether you’re a tenant or landlord, we’ll answer all your questions about a guarantor on lease in this guide, including:
- The advantages and disadvantages of a guarantor on lease
- Who needs a guarantor on lease
- Who can act as a guarantor on lease
- Alternatives to a guarantor on lease
- And more!
Let’s get started!
What Is a Guarantor On Lease?
A guarantor — a term that sounds straight out of a medieval tale — is essentially your financial savior in renting.
They’re a person who agrees to be legally responsible for fulfilling the terms of the lease if you fail to do so.
Essentially, they serve as a form of security for the landlord if the tenant defaults on payments or breaches the lease terms.
They act as a safety net that helps landlords feel secure about renting to someone who doesn’t have a long rental history or doesn’t meet credit or income requirements on their own
Advantages of Guarantor
Unlocking Doors
A guarantor can help you secure a place to live, even if you have poor credit or insufficient income to secure a lease.
Giving Your Landlord Peace of Mind
Landlords sleep soundly at night, knowing there’s a backup plan if they fall short on rent or damage the property.
Expanding Your Options
Expands housing options for tenants who may not qualify independently.
With a guarantor by your side, even the most exclusive apartments become within reach, regardless of your credit score.
Disadvantages of Guarantor
Financial Risks
There are economic risks for the guarantor, who can be liable for unpaid rent or damages.
Failure to meet your lease obligations can tarnish not only your record but also that of your guarantor.
Relationship Risks
There’s always the risk of straining personal relationships if your guarantor needs to step in and cover your rent or damages.
Only ask someone to step in as your guarantor if you have a strong enough relationship to withstand the stress involved and only if you can reasonably expect to meet your financial obligations.
Who Needs a Guarantor?
Typically, someone who lacks a strong credit history, stable income, or rental history may be required to provide a guarantor to secure a lease.
Imagine you’re a broke college student juggling textbooks and part-time shifts with a credit score that’s seen better days.
In this scenario, a guarantor would be your saving grace.
Who Can Act as a Guarantor?
Usually, a guarantor is someone with a stable financial standing and a good credit history.
A parent, uncle, a close friend — anyone with a stable financial standing and a willingness to vouch for you.
Alternatives to a Guarantor on Lease
What if you can’t find a guarantor on lease?
Here are a few alternatives.
Higher Security Deposit
Some landlords might accept a higher security deposit, reassuring them instead of a guarantor’s signature.
Pay in Advance
If you don’t have great credit but a hidden stash of cash, you could consider paying several months’ rent upfront to show the landlord that you can keep up with your lease agreement.
Rental Insurance
If you’re young and have a landlord who is unsure if you can care for the property properly, don’t forget about rental insurance — it’s a safety net for your apartment aspirations, protecting both you and the landlord.
What is the Difference Between a Co-signer and a Guarantor on a Lease?
Both a consignor and a guarantor give a landlord financial assurance, but there is a difference in their legal responsibilities.
A guarantor is not directly involved in the lease agreement but agrees to cover any unpaid rent or damages if you break the lease.
A co-signer, on the other hand, shares equal responsibility for fulfilling the lease.
Picture a co-signer as your lease’s VIP guest—they’re front and center, sharing equal responsibility for the lease.
In contrast, a guarantor operates more behind the scenes, and they step in only if something goes wrong.
What Might Cause a Guarantor to Become Responsible for the Lease?
The goal, of course, is for the guarantor to simply be an extra signature on your lease paperwork, but there are several ways where they may have to become more involved.
If you miss rent payments, cause damage to a property, or commit any other breaches of your lease agreement, your landlord will call your guarantor in to handle the situation.
Should you drop the ball, it’s your guarantor who is responsible for picking up the pieces.
The Bottom Line: Guarantor on Lease
If you face challenges in securing a lease independently, having a guarantor can open doors to housing opportunities that would otherwise be out of reach.
But, you need to understand the responsibilities and potential risks involved for you and the guarantor before entering into any agreement.
Whether you’re a tenant or landlord, clear communication, trust, and understanding are all essential to a successful leasing arrangement.
