A guarantor is only needed if you don’t have the financial backing and history to have a loan approved on your own. If your financial position including your income, expenses, assets, liabilities, and size of your deposit is not enough, you can use a guarantor to provide additional security to the lender by offering a guarantee. This usually comes in the form of equity in a property that they own as security. However, a guarantor should always be aware of the personal risk in case you default on loan repayments. If this were to happen, they will be held liable to pay back the amount owed to the lender.