Guarantor loans can be incredibly helpful when it comes to getting the money you need with minimal hassle. Especially if you’ve had an issue getting a payday loan or similar. These days a lot of people have started applying for these loans, but it seems as if most people don’t really know much about them. You will definitely want to make a point of getting as much information as possible on these loans so that you can prepare yourself properly. The more research you do into guarantor loans, the more you will be able to get out of one when you need money for some important expense.
What exactly is a guarantor loan?
A guarantor loan is essentially just an unsecured loan that requires a ‘guarantor’, which is someone who agrees to assume responsibility for paying off the loan if the borrower is not able to for whatever reason. This type of loan does not require any sort of property to be put down as collateral, but you will need to find someone with adequate credentials who is willing to sign on.
What is the payback period for a guarantor loan?
Those who take out a guarantor loan typically have anywhere from one to seven years to pay back the full amount of the loan. You can typically borrow anywhere from £1,000 to £16,000, though it does depend on the lender as well as your income and the qualifications of the guarantor. A lot of mortgage companies and other types of lenders require a guarantor, especially for those who do not have very good credit.
How do I know if a guarantor loan is right for me?
While it’s true that there are lots of great things about getting a guarantor loan, they aren’t for everyone. These loans are particularly ideal for people with bad credit who have been rejected for other types of loans in the past. If you have found it difficult to get a loan because of your credit history, you will definitely want to consider this option. If you need to borrow a fairly large amount of money, a guarantor loan could provide you with exactly what you need.
Who can be a guarantor?
Anyone with a solid credit score and adequate income can be a guarantor, though there are a few other requirements that you should know about. A person must be at least 21 years old to be a guarantor, and they cannot have any outstanding loans. The better the person’s credit and income is, the more likely they will be to get approved. There will be a standard credit check run on the person who applies to be a guarantor.
What will the interest rate be?
The interest rate that you will pay depends on what your credit is like. Those who have decent to great credit get the lowest interest rates. People with poor credit can get a guarantor loan, but their interest rate is usually significantly higher. When you are applying for this type of loan, both you and the person who will be acting as guarantor must submit various personal and financial details. Your application will be either approved or rejected depending on the information you provide as well as the results of the credit checks that are performed on both parties.
What happens if you default on a guarantor loan?
If the borrower is unable to keep making payments on their loan, the guarantor will assume the responsibility. In the event that the guarantor cannot pay back the loan either, the lender can take you to court to get the rest of the money that is owed.
What are the benefits of getting a guarantor loan?
There are numerous benefits associated with guarantor loans, including approval even with bad credit. As long as you can find a suitable person to sign on as a guarantor, you shouldn’t have many issues with getting one of these loans. It is important that you take the time to find the right lender to get the loan from though, as there will be many to choose from. Guarantor loans can be very helpful when you need a large sum of money fast, but you will need to know as much as possible about them before moving forward.