Glossary
Guarantor
Someone who agrees to repay your loan if you can't. A guarantor's income and credit history can support an application that's borderline on its own.
By Leverage Finance · Updated 17 July 2026
A guarantor signs a guarantee alongside your loan. They don't use the car and don't make the normal repayments, but if you stop paying, the lender can pursue them for the debt. It's a real legal obligation, and the CCCFA requires lenders to make sure guarantors understand it before signing.
In refinancing, guarantors come up in two ways. Some borrowers add one to strengthen a new application. Others refinance specifically to release a guarantor, a parent who backed the original loan, once their own file is strong enough to carry the loan alone.
Our guide to guarantors and car loans covers both directions.
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