1plus1 Loans is a credit provider in the UK offering guarantor loans. The lender started operating in the country back in 2013 with the mission of providing affordable lending options in an expensive credit market. A core theme behind the operations of 1plus1 Loans is trust: the company does not take into consideration the credit score of the borrower as long as their family members or friends are willing to vouch for them and act as their guarantor (provided the guarantor has a good credit score). Although this is typical of most guarantor loan providers, but 1plus1 Loans also aims to ensure the principal borrower is fully capable of affording to the loan repayments so that the guarantor does not have to bear the burden.
Also Check: Best Guarantor Loans Comparison
1plus1 Loans offers guarantor loans.
Guarantor loans require a borrower to have a co-signer on the loan agreement, usually a family member or a friend, who promises to assume the responsibility of honoring the loan agreement in case the borrower becomes incapable to do it, for any reason.
The maximum loan term allowed depends on the magnitude of the loan amount. This is illustrated in the table below.
|Loan Amount||Loan Term Allowed|
Guarantor loans are a great way for borrowers with a low credit rating to improve their credit score, if they make timely repayments and successfully complete the loan term. Although guarantor loans have a higher representative APR compared to other forms of loans available in the market, borrowers may see this as an investment in improving their credit score. With an improved credit score, borrowers can qualify for cheaper credit options.
However, missing a repayment on a guarantor loan can have adverse consequences, both for the borrower and the guarantor. From the borrower’s perspective, it may become difficult to secure credit in the near future. From the guarantor’s perspective, it puts the guarantor’s credit score at risk as well, unless the guarantor makes the payments by the due date as stipulated by 1plus1 Loans.
The following criteria needs to be fulfilled by the guarantor when applying for a loan with 1plus1 Loans. Guarantors must:
A similar eligibility criteria applies to borrowers, however borrowers are not expected to have a good credit record.
The following pros & cons are associated with the service being provided by 1plus1 Loans:
Having a 24/7 online customer support is essential for credit providers as borrowers may face issues with their loans at any time of the day, any day of the week. For borrowers that would rather prefer a call, the 1plus1 Loans staff is available to assist them from Monday to Friday between the hours of 9 am to 6 pm.
Borrowers may overestimate their ability to repay a loan and assure their guarantor of their ability as well. However, if and when they fail to meet the due loan payments, the guarantor then has to assume the responsibility of honouring the payments. To avoid this entire scenario, 1plus1 Loans conducts a thorough income check of the borrower, including a verbal affordability assessment of both the borrower and guarantor, and a check with banks and other financial institutions to verify the income and expenses of the borrower and guarantor.
Each application is considered based upon multiple factors. As long as the borrower’s recent credit history has remained stable and the affordability assessment proves sufficient disposable income after deducting all necessary expenses, there is a good chance 1plus1 Loans may approve the loan.
Many lenders charge a fee to borrowers who wish to repay their loans earlier than the stipulated due date. However, 1plus1 Loans does not charge any such fee and allows its customers to clear out their accounts via either a card or a bank transfer.
Some borrowers may have better credit options available in the market with a much lower APR. Since 1plus1 Loans only offers guarantor loans, the company would not be able to offer borrowers a better/cheaper alternative to a guarantor loan.
1plus1 Loans has a representative APR of 47.8%, as stated on their website. This means that the majority of 1plus1 Loans borrowers are able to secure funding from the lender at this rate, including all the costs associated with the loan.
For example, if someone has borrowed £3,000 for a period of 3 years at the representative APR that will remain fixed over the loan term, the monthly repayment would amount to approximately £143.84. The total interest that the borrower would have to pay on this loan would amount to £2,178.24 at the annual interest rate of 39.7%. In total, the borrower would have to repay £5,178.24 by the end of the loan term.
The following borrowing scenarios illustrate the different costs the borrower would have to bear for a loan with 1plus1 Loans:
|Loan Type||Loan Amount||Loan Term||Total Repayable||Charge of Credit|
The lender does not charge any fee for the application, although borrowers applying through a broker or any other third party may have to bear an extra cost during the application process.
Also, a fee may be added to the outstanding loan amount in case a borrower misses to make a payment within the stipulated due date.
The following information is required when applying for a loan with 1plus1 Loans:
A similar set of information would be required from the guarantor as well.
The application process to apply for a loan with 1plus1 Loans is completely online.
Borrowers need to go to the application form.
The homepage of the website is shown above. To access the application form, borrowers need to select the amount they require and the loan term that is suitable for them. The representative example, shown at the bottom right side of the image above, will change with the choices that the borrower makes, offering a good approximation of the costs that the borrower should expect to bear with the loan. After the borrower has made the necessary selection, click on the ‘Apply for your guarantor loan now’ button to proceed.
The application form looks like this:
After filling out this form, click Next to proceed. Complete the rest of the steps as required by the form and submit it for consideration.
After the form is completed and submitted, the borrower will receive a link via SMS and email to the contract that needs to be signed by the guarantor. The borrower must share this contract with the guarantor.
The guarantor is then expected to scan the pre-credit information as laid out in the contract and tick the relevant boxes to confirm that the stated information has been understood and accepted. At the end, the guarantor’s electronic signature is required, which is basically the guarantor’s full name typed out in the designated signature box. This e-signature is just as legally binding as a hand-drawn signature.
After 1plus1 Loans receives the signed agreement from the guarantor, the lender makes a phone call to verify the information with the guarantor and to confirm, one final time, whether the guarantor understands their responsibility in the loan agreement.
After confirmation has been received from the guarantor, 1plus1 Loans will then release the loan amount into the guarantor’s bank account. This is the final time that the guarantor may back out of the loan, in which case the guarantor may contact the lender and return the loan amount. If the guarantor wishes to accept the loan, then the guarantor is expected to transfer the loan amount to the borrower.
No, the guarantor must live at a different address than the borrower to qualify as a guarantor for the loan. However, this condition excludes parents as they can act as guarantors for loans being taken out by their adult children even while living in the same household.
As soon as a loan repayment is delayed, 1plus1 Loans immediately sends out a text message and email to both the guarantor and the borrower to alert them about the missed payment. The lender will first try to get in touch with the borrower to inquire about the missed payment. In case it fails, then the lender will try to charge the borrower’s debit card with the due payment, and then use the CPA facility. In case 1plus1 Loans fails to acquire the payment, the lender may add a late fee to the loan and send out a letter to both the borrower and the guarantor. It is then up to both the guarantor and the customer to honour the loan obligation before it defaults.
No. Guarantors have also signed the loan agreement as secondary borrowers and, if the borrower fails to make repayments, for whatever reason, then it is the guarantor’s legal obligation to make repayments until the entire outstanding loan amount is discharged. Refusing to make these repayments can damage the guarantor’s credit rating, and defaulting on the loan can result in additional fees and penalties.
Yes, borrowers/guarantors can choose to repay the loan earlier than the stipulated loan term without incurring any additional costs.
1plus1 Loans is a lender of guarantor loans. It does not provide broker services.
Are you not completely convinced about borrowing from 1plus1 Loans? Would you like to look at alternative lenders that also provide guarantor loans? You should check out the options mentioned below. These have also been reviewed and rated by Credit Raters.
|Guarantor My Loan||Guarantor My Loan is offering guarantor loans in the UK between the amounts £1,000-£10,000. The representative APR charged by the service is 29%. The loan term spans between 1-5 years.|
|Trusttwo||Trusttwo gives out guarantor loans between the amounts £500-£10,000 at a representative APR of 49.5%. Loan term is allowed between 1-5 years.|
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