Getting a loan in place if you’ve got bad credit can be a minefield and, whilst we deal with plenty of specialist bad credit lenders, there may be times when a guarantor is needed to secure your funds.
Let’s take a closer look at how guarantor loans work and what you can do to get a great deal today.
What Are Guarantor Loans?
Guarantor loans are a type of loan in which the applicants ability to repay is guaranteed by a third party. Designed for people with a poor credit history, they allow you to borrow funds that you wouldn’t normally be accepted for on the proviso that a friend, colleague or family member will step in to make payment should you be unable to.
Who Can Be My Guarantor?
Anyone can be your guarantor as long as they know you. This could be a friend, work colleague or family member but they’ll need to be aware what their responsibilities are should you be unable to pay.
The great news is that by keeping on top of your repayments, you’ll actually improve your own credit score rather than your guarantor’s meaning that you may improve your chances of accessing more traditional borrowing methods in the future.
How Do I Apply For Guarantor Loans?
Applying for guarantor loans is quick and easy although there are a couple of extra hoops to jump through when compared to more traditional personal loans.
First, you’ll need to find a guarantor who knows you will enough to vouch for your payments. Remember, they’ll be responsible if you can’t pay so pick someone who trusts you enough to keep up with your payment schedule.
Some guarantor loans lenders like to speak to the guarantor before authorising the loan so, whilst you may be accepted in principle, they won’t be able to sign off the funds until they’ve had either verbal or written confirmation from your guarantor.
Once that’s all done and signed off, funds will usually be transferred directly to your bank account within 24 hours and a copy of the agreement will be sent to both you and your guarantor.
So what are you waiting for? Register with CreditRaters.com today for a free, no obligation guarantor loans quotation and find out why so many people use us for their financial comparisons.