A guarantor loan can provide you with the perfect way to get the money you need quick, but there are a number of things that you should know before applying for one. Many people are getting these loans because they can be so helpful in a tight financial spot. The more time you take to learn about guarantor loans, the more likely you will be to make a good informed decision. This is definitely not something that you will want to rush into by any means.
How Guarantor Loans Work
You can get a guarantor loan for anywhere from £1,000 to over £10,000. The repayment period of these loans can range from one year to more than five years, depending on the lender and the amount you borrow. These loans differ from standard unsecured loans in that there are three different parties involved. There is the lender, the borrower and the guarantor. The guarantor is the person who agrees to take over payment of the loan in the event that the borrower cannot pay the money they owe for whatever reason.
It is important to keep in mind that a guarantor can be anyone, provided they do not have a direct financial link with the borrower. A majority of lenders will only consider guarantors who are 21 years of age or older with a good credit history. In some cases, the guarantor must also be a homeowner. You will need to take the time to find someone who matches this description. It’s also crucial to choose someone you really trust to be your guarantor.
Benefits of getting a guarantor loan
There are many different benefits associated with guarantor loans, including the fact that your credit is not a factor. As long as you have someone with a good credit history who is willing to act as your guarantor, it doesn’t really matter what your own credit is like. If you have been rejected for other loans based on the state of your credit, this is definitely an option to consider. You will be able to borrow money at an average interest rate of 45% to 50%. If you need money fast, a guarantor loan could be the solution you need overall.
Guarantor loans are best for those who have weak or poor credit. If you have some type of emergency expense that you need taken care of quick, you will find that this kind of loan could be particularly ideal. A lot of people who don’t qualify for standard loans end up applying for guarantor loans, and most are approved. While it is important to remember that approval is never guaranteed, there is a good chance that you will be able to get one if you meet all of the necessary criteria.
Choosing the right lender
You will need to make a point of choosing the right lender to borrow from so that you will be able to get the absolute best deal possible on your loan. The lender that you decide on will ultimately determine the specific conditions of your loan, so you will therefore need to do some research. Compare interest rates with various lenders until you are able to find the best deal. If you want to save yourself as much money as possible, you will have to make a point of shopping around.
Use the internet to your advantage
The internet is a very powerful resource when it comes to comparing deals on guarantor loans and choosing a reputable lender whom you can trust. Take all the time you need to find the right lender to borrow from so that you don’t end up getting ripped off in any way.
Is a Guarantor Loan right for you?
The fact is that guarantor loans aren’t right for everyone, but it could be perfect for you. If you need money fast and/or have a low credit score, you will certainly want to think about applying for one of these loans right away. The application process won’t take long, and you will get your money fast if you are approved. Keep in mind that the person you choose as your guarantor should have a solid credit history and adequate income.