What Is A Guarantor For An Apartment?

With rent prices rising across the nation, some prospective renters may be looking for a guarantor for their apartment application. Let’s take a look at what a guarantor is, who qualifies to be a guarantor, and some alternative solutions.

What Is A Rent Guarantor?

Also referred to as a lease guarantor, a rent guarantor, is an individual who agrees to pay rent if a tenant cannot make the payment. This puts the guarantor on the hook for terms dictated in the lease agreement or contract. This can include not only paying the monthly rent but also any move-in and move-out fees, late fees, or other rent-related charges.

A guarantor offers a layer of protection for landlords. For prospective renters, having a guarantor can also make them a stronger candidate when submitting an application for a unit.

Who Can Be A Guarantor?

Rent guarantors are typically parents, relatives, or close friends of the prospective renter. In order to qualify as a guarantor, you will need to provide the landlord with a lot of information. This usually includes proof of income, bank statements, and a Social Security number for a thorough background and credit check.

If the renter is having a difficult time finding a guarantor, there are some guarantor companies that can be hired to guarantee the lease. However, these services do not come for free. Renters can expect to pay these companies roughly 4%-10% of their annual rent.

Who Needs A Rent Guarantor For An Apartment?

There are many reasons why a prospective renter may need a guarantor when applying for an apartment. Let’s look at a few of the common reasons below.

Students

College students studying full-time could benefit from having a guarantor on their lease.

First-Time Renters

Landlords will typically feel more comfortable renting to someone with no rental history if they have a guarantor.

People With Bad Credit

A bad, lack of credit history, or no history at all can be quite an obstacle without the presence of a guarantor.

People Who Earn A Low Income

Individuals who cannot meet the landlord’s income standard should look for a guarantor. This also applies to individuals who happen to have a sporadic income.

Guarantor Alternatives

Of course, there are a few alternatives to having a guarantor, including the following options.

Rental Assistance

Eligible low-income earners may qualify for rental assistance from either government agencies or community organizations.

Roommate(s)

Finding a roommate is always a great way to lessen your monthly rent payment.

Conclusion

If you are thinking about becoming a guarantor for a family member or close friend, there are a few things to consider. First, you have to make sure you can afford to make the appropriate payments if the renter fails to meet the requirements. You could be helping a family member or friend begin their life as an independent adult.