TFS Loans Review of 2020 - Get Loans Up To £15,000 lender
Last updated: 18th Jan 2020

TFS Loans Review

About

TFS Loans, which gives Guarantor Loans, are provided by the TFS Group which was founded in 2003 for those borrowers who find banks and such financial institutions inaccessible. The Group provides financial products to consumers in the UK, especially in the niches of guarantor unsecured credit and secured personal loans. Guarantor loans, offered by TFS Loans, are basically signed by both the loan seeker and a guarantor, usually a family member or a friend, and are unsecured credit loans. The guarantor becomes liable to pay monthly instalments if and when the borrower fails to do it. TFS Group has received multiple awards, including the UK’s Best Guarantor Loan Provider, and in 2018, a Business Excellence Award.

Also Check: Creditspring Loans Review

Types of loans

TFS Loans offer just one type of loan called a Guarantor Loan.

  • This type of loan requires the borrower to have another person co-sign the loan with them, guaranteeing to the loan provider that, in case the borrower fails to make the monthly repayment, the guarantor will do it instead.
  • This guarantor is usually a family member or friend of the borrower, basically, someone who trusts the borrower to make the repayment in time.

From TFS Loans perspective, this guarantee from another person is enough evidence to approve the loan, and that is why a borrower’s credit history is not taken into consideration when making the loan approval decision.

This makes guarantor loans especially attractive to those with a poor or no credit history, as such borrowers are unable to secure affordable loans from other loan providers either due to ineligibility or high interest charges.

  • TFS Loans allows borrowing of up to £15,000 at a time, and repayments can be made in monthly instalments, that are determined at the beginning of the loan agreement, over a minimum period of 24 months (2 years) and a maximum period of 60 months (5 years) depending upon the amount of the loan.

The following table shows the repayment times allowed under different loan amounts.

Loan Amount (£)Minimum Repayment TimeMaximum Repayment Time
1,000 – 1,50012 months36 months
2,00024 months48 months
2,500 – 5,00024 months60 months
5,500 – 6,00036 months60 months
6,500 – 15,00048 months60 months

According to the lender’s website, guarantor loans offer borrowers a cheaper source of funds compared to other loan options available in the market. The Representative APR quoted by TFS Loans is 39.9% (for amounts £5,000-£10,000).

  • Another feature of guarantor loans is that they are unsecured, meaning that borrowers are not required to pledge property or any other assets as collateral to acquire the loan.
  • This means that the borrower can be living in rented accommodation without owning a house and still be eligible to secure a guarantor loan, provided a guarantor is available to co-sign it.

Since the amount that can be borrowed with a guarantor loan is substantial, it can be used in any legal way. For example, borrowers can use guarantor loans for debt consolidation purposes, to pay off their credit card bills, to put down-payment on a car, or to even spend on a wedding ceremony.

Eligibility Criteria

From the borrower’s perspective, the following eligibility criteria apply. The borrower must:

  1. Have an eligible guarantor willing to co-sign the loan.
  2. Be a UK resident
  3. Be a homeowner if the borrower wishes to loan an amount greater than £10,000.
  4. Be over the age of 18 and under the age of 75 till the time the loan is completely repaid.
  5. Have a bank account in the UK (for Direct Debit)
  6. Have adequate monthly income stream of above £1,000 to make monthly repayments.

Also Check:

The guarantor needs to fulfil the following criteria. The guarantor must:

1) Own a home in the UK

This also includes homes that are under mortgage. Although TFS Guarantor Loans are unsecured, meaning they do not treat homes as collateral, the lender still requires that guarantors are homeowners.

2) Have proven good credit record

After securing permission from the guarantor, TFS conducts a mandatory credit check to assess whether the guarantor has an acceptable credit history. Hence, borrowers are encouraged to select guarantors that have a good record of credit.

3) Have the ability and willingness to make loan repayments on behalf of the borrower

It is the borrower’s responsibility to make monthly repayments in a timely manner and until the entire loan amount plus interest charges are repaid. However, in case the borrower experiences a financial setback and becomes unable to make the monthly loan repayments, TFS will approach the guarantor to make monthly repayments on the borrower’s behalf until the outstanding loan balance is fully repaid.

4) Be between the 18-75 age bracket

The guarantor needs to be above the age of 18 and below the age of 75, both at the loan’s initiation and till it is fully repaid. For example, an individual aged 73 cannot be a guarantor for a loan that has a payment plan spanning over three years, as the guarantor’s age would be above 75 with a few loan repayments still outstanding.

Pros & Cons

Here are the pros & cons for choosing TFS Loans:

Advantages
    • Improve credit history

For those suffering from a bad credit history, guarantor loans offer a good opportunity to improve it. The loan is taken on the guarantee of another individual with a good credit record, making it possible for borrowers with a bad credit history, who would likely not be approved for a loan elsewhere, to secure a loan. When the borrower makes timely repayments on this loan, the borrower’s credit history automatically improves. An improved credit score can enable borrowers to take out cheaper loans from mainstream sources such as banks, also without the need of a guarantor.

  • Take out up to £15,000
  • There are no setup or any upfront fees
Disadvantages
  • Finding a guarantor, and one who is also a homeowner, can be challenging for some borrowers
  • If the borrower becomes unable to make repayments, TFS will approach guarantors to make the repayments, which can be embarrassing for the borrower.

How much does a TFS Loans guarantor loan costs?

The representative APR being charged varies by loan amount:

  • £1,000-£2,500 🡪 69.9% APR
  • £3,000-£4,500 🡪 48.9% APR
  • £5,000-£10,000 🡪 39.9% APR
  • £10,500-£15,000 🡪 29.9% APR
  • TFS will charge a maximum of 58 days worth of interest in case the borrower wishes to pay off the loan earlier than the full loan term.
  • There are no upfront or setup charges

The following examples illustrate the charges incurred on the borrower for different loan amounts and loan terms.

Loan TypeLoan AmountLoan TermTotal RepayableCharge of Credit
Guarantor£1,00012 months£1,317.36£317.36
Guarantor£100036 months£2,042.64£1,042.64
Guarantor£7,00048 months£12,908.16£5,908.16
Guarantor£12,00048 months£19,574.40£7,574.40

Information Required To Apply

The following information needs to be given to TFS Loans to process a loan application:

  1. Basic and contact information including names, dates of birth, phone numbers, and email addresses of both the borrower and the guarantor.
  2. Guarantor is expected to give further information during the phone call with TFS Loans so the latter can conduct a credit check, including I.D. information, bank account details, and mortgage/property details.
  3. Further documentation, such as bank statements or payslips, may be sought from both the borrower and the guarantor.

How To Apply for a TFS Loan?

According to the TFS Loans website, it can take an average of 2 to 4 days for a loan application to be processed, although, in some cases, a loan may be approved within 24 hours of filing the application.

Step 1

The first step requires the borrowers to fill in all the personal information as intimated on the application form. This application form can be accessed online by selecting the required loan amount and the repayment period, and then clicking Apply Online will take the borrower to the application form. Borrowers are also expected to provide the name as well as the phone number of the person who will act as their guarantor.

Step 1

At this stage, a representative from TFS Loans will call the guarantor of the borrower and thoroughly explain the nature of the loan and the role of the guarantor. The guarantor is also expected to provide personal information at this point to the TFS Loans representative, which is required to check the credit history of the guarantor. Once the credit check is passed and the loan is approved, the guarantor is informed of the amount that would be disbursed for the borrower.

After the phone call between TFS Loans and the guarantor, TFS will email or post the documents to both the guarantor as well as the borrower. Whether the documents are posted or emailed depends entirely upon the preferences of the borrower/guarantor. Upon receiving these documents, the guarantor is expected to go through them and develop a clear understanding of what is being said in them, after which the guarantor needs to sign the documents and send them back to TFS.

With a few applications, TFS may also request additional documentation, including payslips or a formal bank statement, from the guarantor at this point.

Another call is made by TFS to the guarantor in case the guarantor has any further questions before the loan amount is disbursed. During this call, the guarantor is also told exactly when and where the funds would be transferred by TFS.

Finally, TFS makes the transfer into the guarantor’s stipulated bank account. It is expected that the guarantor will then pass on the funds to the borrower.

FAQs

Although many loans are processed within 24 hours of the loan application, the average processing time, as stipulated by TFS Loans, is 2-4 days.

Yes, TFS Loans allows overpayments. However, overpaying will only reduce the time that the loan remains outstanding. To reduce the interest charge on the loan, an extra payment exceeding the amount of £500 needs to be made each time.

TFS Loans does not register the guarantor as a borrower, however the search conducted by the lender will keep showing on the guarantor’s report for 12 months, and this can have an impact on the guarantor’s credit score.

Yes, there is no limit on the number of borrowers per guarantor, as long as a guarantor can prove the ability to repay all loan repayments on behalf of the borrowers for all the outstanding loans.

In order to prevent fraud, TFS Loans takes an additional precautionary measure of depositing the loan amount into the guarantor’s bank account, and not the borrower. This way, the guarantor also confirms receipt of loans funds and commits to repaying it in case the borrower becomes unable to do it.

Loans Like TFS Loans

Want to see what other guarantor loan options are available to you in the UK? Check out some of the alternatives below, being offered by other lenders in the UK that have also been reviewed by Credit Raters.

LenderLoan AmountRepresentative APRLoan Term
Guarantor My Loan£1,000 to £10,00029% APR1-5 years
UK Credit£2,000 to £15,00039.9% APR (£4,000 to £6,999)18 months – 5 years
Trusttwo£500 to £10,00049.5%1-5 years

TFS Loans Promo Codes

There are no promo codes available for TFS Loans at this time.

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