A person who has a good credit and a stable job can act as a guarantor. Guarantor loans are specially indicated for the borrowers with a poor credit history or with no history, whereas others types of borrowings can be not available for such borrowers. With the help of such loans you are able to improve your scores if the payday loans are paid off without any problems. If you manage to repair your credit scores, you will have the opportunity to qualify for some other forms of loans with better terms in future. Note that the individual takes on responsibility when acting as a guarantor which is a rather risky thing. The guarantor loans are unsecured borrowings that are based on the guarantor's credit history. Such loans have quite competitive interest rates making such loans quite a beneficial type of a borrowing. Usually someone whom you know very well and whom you can trust can be a guarantor for your loan. In most cases it is someone from your family or a friend. Your guarantor must know your financial standing and your ability to make the repayment of the loan. Guarantor loan companies offer such loans to the borrowers with no credit history and to those who have bad credit scores provided that the guarantor cosigns the loan agreement together with the borrower.