Guarantor loans have become very popular for a number of reasons in recent years. There are many people who can benefit from getting this type of loan. If you need to borrow money right now, this is an option you should look into. It is definitely one of the most effective ways to get approved for a decent-sized loan. In this article you will get the information you need on guarantor loans to decide if one is right for you.
What is a Guarantor Loan?
A guarantor loan is a loan that is typically paid back in a serious of instalments. It requires a person (the guarantor) who agrees to take on the borrower’s debt if they are unable to continue making payments. Whether you lose your job or even die, this person will be legally obligated to keep making payments on your behalf until the debt has been completely paid back.
How Guarantor Loans Work
You will have anywhere from one to five years to repay the guarantor loan you take out, depending on the lender and the amount you borrow. You’ll be required to pay interest on your loan, though the rates are typically very reasonable. You pay the loan back in instalments on a monthly basis. If you miss one of your payments, you can request that the guarantor pay it on your behalf.
Why Should I Apply for a Guarantor Loan?
There are actually a number of reasons that you should consider applying for a guarantor loan, including:
- High approval rating: If you are able to find a suitable guarantor, your chances of getting approved for a loan will skyrocket.
- Large loan amounts: You can potentially borrow several thousand pounds with a guarantor loan, though it depends on your income. These loans are typically for larger amounts than most short-term loans.
- Low interest rates: While there is no guarantee that you will get a low interest rate with your loan, it is certainly a possibility. Lots of people who get guarantor loans end up with very reasonable rates. Lenders are much more willing to give people low interest rates when they have someone to serve as a guarantor for the loan.
- Longer terms: A longer term means paying more interest, but it also gives you more time to pay back the loan. When you consider the low rates for these loans, the longer terms can definitely work in your favour.
- Fast dispersal of funds: Guarantor loans are known for how quickly they pay out. Most people typically receive their funds within a day or two after being approved.
Applying for a Guarantor Loan
You can apply for a guarantor loan online, which is very easy and convenient. If your application gets approved, you can expect to receive your funds within 24-48 hours. Make sure that you take the time to fill out the application in full with completely accurate information. You don’t want to lie about anything, because it can only work against you. Filling out an online guarantor loan application shouldn’t take very long at all.
There are certain requirements for guarantors that you will need to keep in mind when choosing the right person to serve in this role for you.
Some of these requirements include:
- Must be over the age of 18
- Solid credit history and decently high score
- Homeowner (this is just a plus)
- Active checking or savings account
- Legal UK citizen
- Adequate income
- Stable job history
If the person does not meet these minimum criteria, they will likely not be approved to act as the guarantor for the loan you are trying to get.
Before you Apply
There are a few key things that you will need to take into consideration before you apply for a guarantor loan. Make sure that you spend a decent amount of time looking for the right person, because you don’t want to choose just anyone. You also must find a reputable and legitimate lender. There are many private lenders that you can borrow from, but not all of them will be able to give you a great deal.
The fact is that guarantor loans are a wonderful borrowing option for many people, especially those who have bad credit. This is often one of the last options that people with low credit ratings have, but it’s not that bad at all. In fact, you can potentially get an excellent overall deal on a loan if you have the right person as your guarantor. The interest rates are quite reasonable, especially for private lender loans. This is one borrowing option you need to at least consider before making a decision either way.