Guarantor loans have helped lots of people to get the money they needed, and it could be the right option for you too. There are quite a few attractive things about these loans, and the more information you get on them the better of a choice you will be able to make. The fact is that most people don’t know nearly enough about these loans, and as a result they don’t end up taking advantage of a solution that could really help them. This article will provide you with just the facts about guarantor loans so you can make the right overall choice.
They Are Ideal for People with Bad Credit
Having bad credit can make getting a loan difficult to say the least, which is why so many people end up turning to guarantor loans. These loans are much easier for people with low credit scores to get because there is someone else with good credit (the guarantor) that will agree to take over payments on the loan if the borrower cannot for whatever reason. Even those who have very low credit ratings can still get approved if they have an eligible person to act as the guarantor.
You Cannot Use Just Anyone as Your Guarantor
Most lenders have fairly strict standards for guarantors, even those who say they don’t offer credit checks. So you will need to keep this in mind before even filling out an application. The person who acts as the guarantor on your loan will need to have a respectable credit score/history, income and employment history. It can be a bit challenging to find the right person for this role, but it’s certainly worth the effort. A lender should be able to tell you fairly quickly if a certain person will get approved as a guarantor on the loan you need. The lender needs to trust that the person will be able to step in and pay off the remainder of your loan if you cannot.
Applying is Very Easy
These days applying for a guarantor loan can be done very quickly and easily by simply going online. If you are interested in getting one of these loans, you will be happy to know that you don’t even have to leave your house. You can fill out an application online, and if you are approved your funds will be electronically transferred right into your checking account. There is always the option to physically go down to a lender’s office in person, but it isn’t necessary anymore. You should hear back about the status of your application within several hours of submitting it online.
Approval is Never Guaranteed
While it is true that lots of people across the UK get approved for guarantor loans each year, approval is never guaranteed. This means that you should manage your expectations so you don’t get carried away. Nobody should ever just assume that they are going to get one of these loans, because there is always the possibility that your application gets rejected. The stronger the credentials are of the person you get to be your guarantor, the better your chances will be.
There are Certain Requirements You Need to Fulfil
The person you get to act as the guarantor will be heavily scrutinized by the lender, but there are certain requirements that you will have to meet as well. You must be a legal citizen of the UK, over the age of 18, and have a valid checking account somewhere. The lender will also look at documents you submit for proof of income to see if you will realistically be able to pay off your loan on time. If you are able to meet these basic requirements, your chances of getting approved are fairly good.
There are Risk That Come with Being a Guarantor
If someone has asked you to act as a guarantor on their loan, there are a few things that you will need to know before agreeing. It is important that you take a look at some of the very real risks that come with doing this. You will need to keep in mind that there is always a chance that the borrower will no longer be able to make payments on the loan, in which case you will be responsible for paying it back in full and on time.
In the event that you are not able to pay back the loan on time, your credit will suffer as a direct result. If you do not think that you will be able to pay back the person’s loan if they fall through, you shouldn’t accept. You will always want to think twice before becoming a guarantor, because once you sign the contract there is no turning back.
Guarantor Loans are Flexible
Most guarantor loan lenders are pretty flexible when it comes to the term length and other things relating to the loans. You should have no problem getting a term that is reasonable and affords you plenty of time to pay back the money you borrow. These lenders are known for being particularly amenable with those whose applications are approved. You simply will not get this same kind of flexibility with other types of loans. You also probably won’t be asked what you intend on using the money for, so you will have complete freedom in this respect.
Is a Guarantor Loan Right for You?
Many people have benefited tremendously from guarantor loans, but they aren’t the right borrowing solution for everyone. The more time you spend researching these loans, the better your chances will be of making a smart financial decision. A guarantor loan could help you out a lot if you need money for something major but have bad credit. This is of course assuming that you will be able to find a qualifying individual to sign onto your loan as a guarantor. The process for getting one of these loans is quite fast and simple though, so you won’t have to jump through a lot of hoops.