Personal loans · Guide

Using a guarantor for a personal loan in South Africa

A guarantor is someone who agrees to repay your loan if you cannot. In South Africa this arrangement is usually a suretyship, and it carries real legal weight for the person who signs it. Whether you are thinking of asking someone to stand for your loan or you have been asked to do so yourself, it is worth understanding exactly what that means before anyone signs.

What is a loan guarantor?

A guarantor is a person who promises a lender they will repay your loan if you fall behind. In South African law this promise is usually a suretyship: the guarantor stands as security for someone else’s debt. If the main borrower defaults, the lender can turn to the guarantor for the outstanding balance, including interest and costs.

Because it makes the guarantor personally responsible for a debt that isn’t their own, standing surety is a serious financial commitment — not a favour that costs nothing. Most personal loans in South Africa don’t require a guarantor at all.

A suretyship must be in writing

A suretyship is only valid if it is in writing and signed by or on behalf of the guarantor. This requirement comes from section 6 of the General Law Amendment Act 50 of 1956. A verbal or unsigned promise to stand surety is void — it cannot be enforced.

It must also set out the material terms: who the creditor and the main borrower are, and the nature of the obligation being guaranteed. If a material term is missing, the defect generally can’t be fixed later.

One nuance worth knowing: a “suretyship” (which secures another person’s debt and must meet these writing formalities) is not the same as an independent “guarantee,” where the signer takes on a primary obligation of their own. The two can be treated differently in law, and the effect depends on how the document is worded. Whatever it’s called, read it in full and get advice if anything is unclear before you sign.

The risks of being a guarantor

If you are asked to stand surety, weigh these risks carefully. The commitment is real, and it can last a long time.

A simple rule of thumb: only stand surety if you could comfortably repay the whole debt yourself, and you fully understand what you are signing.

Do you need a guarantor to get a loan?

In most cases, no. NCR-registered lenders assess each applicant on their own income, affordability and credit record. Under the National Credit Act, a registered lender must take reasonable steps to check that you can afford the repayments before agreeing to a loan — an affordability assessment it has to do regardless of whether anyone stands surety for you.

A guarantor may come up when a borrower’s own profile is thin or their credit record is weak, but it is rarely the only option. If your application is declined, adding a guarantor shifts the risk onto someone you care about, so it’s worth trying the safer routes below first.

Safer alternatives to consider first

Before asking someone to stand surety, it’s often better to strengthen your own application:

• Work on your credit record. Paying accounts on time and keeping balances low tends to improve how lenders see you. Scores differ by bureau, so there’s no single national number — the direction of travel matters more than any one figure.
• Borrow a smaller amount over a shorter term. A loan that fits comfortably in your budget is easier to approve than a larger one you have to secure with a guarantor.
• Compare lenders rather than reapplying blindly. Different lenders weigh applications differently, so comparing offers based on your profile can find a better fit.
• Check your own credit report first. You’re entitled to a free report from each registered credit bureau once a year — fixing an error on it can help before you apply.

If a guarantor really is the right route for your situation, make sure both of you understand the suretyship in full, and that it’s properly in writing and signed.

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