Everything First Time Borrowers Should Know About Guarantor Loans
You will have lots of different types of loans to choose, so you don’t want to make your choice lightly. The more you learn about guarantor loans, the better your chances will be of getting the most from one. These loans offer a wide range of benefits that you should know about before making up your mind either way. The information in this article will help you to make a decision that will match your needs perfectly.
What is a Guarantor Loan?
First we will take a look at the nature of guarantor loans. It is basically a loan that requires you to find a “guarantor”, which is someone who co-signs. This person has an equal responsibility when it comes to paying back the total amount of the loan. If you cannot fulfil your obligation to the lender, the guarantor automatically assumed responsibility.
Who is Eligible to be a Guarantor?
When you are looking for someone to serve as a guarantor on your loan, there are a few things to keep in mind, including:
- Credit rating: A person must have at least a decent credit score to be approved as a guarantor on someone’s loan. They need to have a high score and a clean history.
- Income: There will definitely be requirements regarding the guarantor’s income as well. They need to make enough from their job for the lender to feel comfortable in their ability to pay back the loan.
- Job stability: A solid employment history will certainly work in their favour as well. Lenders don’t like to see applicants with spotty job histories.
- Other requirements: This person also has to meet the minimum requirements of getting a no credit check loan, including legal UK citizenship and being over 18 years of age.
Before you choose someone in particular to be your guarantor, you need to think carefully. It is important that you select a person who is very trustworthy and can be relied on.
Benefits of Obtaining a Guarantor Loan
There are plenty of benefits associated with guarantor loans that you should really be aware of before making a final decision.
Higher Likelihood of Approval
Getting a guarantor to sign onto your loan will instantly boost your chances of approval. You will most likely have a much easier time with getting the green light for your loan application this way. The lender will feel a lot more comfortable giving you a loan if there is someone to step in and pay it off if you are unable for whatever reason.
If you have bad credit, getting a loan of any kind can be a bit tricky. This type of loan will instantly boost your chances of approval, even if your credit rating isn’t great. This is one of the most common reasons that people apply for these loans in the first place.
It Costs Less than Other Loans
Guarantor loans also tend to cost borrowers less than other types. This is because the interest rates are usually lower. When you don’t have a high rate to contend with, you won’t have to pay nearly as much.
This will also increase the chances of paying back your loan on time without any problems. The rate that you end up getting will depend on numerous factors though, such as the amount you are borrowing.
Get the Money you Need Quickly
If you need a substantial sum of money and cannot afford to wait, a guarantor loan is worth considering. This type of loan can give you a way to obtain funds fast. It usually doesn’t take more than a day or two to complete this process. It can be very helpful when you have some sort of expense that is absolutely crucial.
Before you Borrow
You will need to make a point of researching some of the lenders on the internet that give out guarantor loans. This will serve to help you quite a bit when it comes to getting the best possible overall terms for your loan. It will also help you find a reliable and trustworthy lender, which is also very important. Compare the rates and fees that these lenders charge before settling on a certain lending company.
There is no question that guarantor loans can be helpful to many people. You definitely want to spend some time looking into this option before making a decision. It is a great option for just about any person who needs to borrow money right now. This is an especially good type of loan for those with bad credit. If you have a bankruptcy or vehicle repossession in your credit history, a guarantor loan is worth considering. These loans are pretty easy to get and can even help you save quite a bit of money.