Category: Guarantor Loans

Who Are Guarantor Loans for?

There are all sorts of loans available and some of them are there for specific purposes of specific things. You may be looking at guarantor loans and wonder who they are actually for. Although the lenders will not specify this and will be happy to lend to anyone there are features of the loan, which mean that it is aimed at certain types of borrowers.

Those with a Poor Credit Record

With a guarantor loan, the borrower does not need to have a good credit record. This is quite different to many other types of loan where a credit check is needed and anyone that does not have a good credit record will be rejects. This type of loan therefore allows those people that cannot normally borrow significant sums of money to be able to.

Those Wanting to Borrow Between £1,000 and £10,000

If you want to borrow thousands of pounds, it is not always easy to do so. There are lenders available, but when you want this much money you will need to go through quite a rigorous credit check normally. However, if you do not have a good credit record then this will not work for you and you will need to find an alternative way to borrow the money and the guarantor loan will provide that.

Those Who Can Find a Guarantor

However, if you want a guarantor loan, you will need to find a guarantor. This is a person who has a good credit record and will be prepared to pay any repayments that you cannot afford. How easy it will be to find someone that is willing to do this for you will depend on how well off your friends and family are and how likely they are to want to help you out. It can be tricky knowing without asking people as well as normally people do not tend to be that open about their financial situation and so you may have to ask them for help.

If you fit these criteria, then it is still worth having a good think before getting out this sort of loan, as you should with any loan. You need to consider your reasoning for the loan and think about whether you feel that it is a good one. Find out how much the loan will cost you and that will allow you to decide whether you feel it is good value for money. Consider that cost and the item you are buying and whether you really think that it is worth that extra money. You should also compare different loan types and think about whether there are any others that better suit your needs. There are lots of loan options available to us and checking them out and comparing them is important as it will mean that we will be able to work out which one will most closely fit out needs. It is also really important to make sure that we compare the lenders as well. You will find that there are a lot of lenders offering this sort of loan and it is a good idea to compare them. You do not want to pay more than necessary, so compare the costs of the loan but also compare other features and then you should be able to find the one that offers you the best value for money. It might seem like a lot of work, but it will be worth it if it means that you can have a better borrowing experience as a result of it. So consider setting a bit of time aside to fit in this research.

How Can I Choose a Guarantor?

Choosing a guarantor can be a bit of a tricky process. This is because you will find that you will not always know many people that fit the criteria. It is good to be aware of the criteria and then you will be able to choose the right person to help you.

Good Credit Record

Your guarantor will need a good credit record and this means that they will be good at handling money have a good income and things like this. There are different factors though that lenders will use when they are considering someone’s credit record. The different lenders will have different criteria and this means that you can never be completely sure as to whether they will be happy with your choice of guarantor. However, if you know someone that seems good at handling their money, then they will be a good choice. Of course, this might be something that people keep very private and so you may have to ask them.

Be Able to Afford Repayments

You will also need to make sure that you pick someone that will be able to afford to cover the cost of the repayments if you are not able to. It is wise to find out how much they will have to pay if they do need to make a payment. You may know whether they will be able to afford this, but it could be a good idea to actually make sure that you let them know as well. This is because only they will know the specific details of their finances. It is wise to tell them to assume they have to pay every month and whether they can afford that. Of course, you will not want them to have to do that and it is probably very unlikely, but it is a good idea to prepare them just in case.

Will be Willing to Help

You will also need to pick someone that is willing to help you. You will need to think about who you think might do that for you. It will need to be someone that you are really close to as they will be happy to help, whereas someone that you are not that close to is far less willing to. It could be more likely for most people that it will be family members that will help them rather than friends. However, each of us is different and you will need to think about who you might ask. It could be good to have a list and move through it, asking different people so that you can hopefully find someone that will be willing. It is a good idea to make sure that they are fully aware of what they are letting themselves in for. It can also be wise to discuss with them what will happen if they do have to make a repayment for you. Come to an agreement with them with regards to whether you will need to repay them or not and if so when they want you to do it. The reason for this being so important is that you and them may have different expectations. It could mean that you will expect that you do not have to repay them, but they might expect you repay as soon as you can. Therefore, it is a good idea to make sure that you have an agreement about this before you take out the loan. Even if dealing with payday loans in the UK. It can even be good to have something in writing and then you will not be able to have a disagreement with them about it, if they do have to make a repayment on your behalf.