Should I Finish Paying the Loan I Guaranteed?


Dear Steve,

I have a guaranteed loan for a relative they have not paid, so I’ve been paying but just decided not to.

There is only 300 left, whats the worst they can do if anything?

It is unsecured



Dear Judi,

The path of least resistance and angst can be achieved by repaying the balance due and thinking about it as the cost of learning never to guarantee a loan for anyone other than yourself.

When you guarantee a loan for someone you are legally agreeing to be entirely responsible for the loan if the other person fails to pay. This is what you signed up for.

The worst that a creditor can do is place a negative entry on your credit report which will reduce your credit score and increase your cost of future credit. The creditor can send the account to collections and pursue you to pay or they might take you to court and win a judgment against you.

If the balance is only 300, my advice is to pay it off and never do it again. There is no sense in wasting a perfectly good mistake you can learn from.


You are not alone. I’m here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don’t give up.

Damon Day - Pro Debt Coach