Guarantor Loans for Cheap Loans
If your credit score is not that well to get a regular loan, particularly, comparing competitive rates; this is where guarantor loans comes in to help you out.
Guarantor loans and your credit rating
If repayments are made within the specified time period, a guarantor loan may improve a poor credit rating or build one that doesn’t exist. If you fail to adhere to your repayment schedule, you will be charged increased interest rates which will push you further in debt and damage your credit history.
Soft search guarantor loans
If you need a guarantor loan, just fill out an application and we are available to help you out. We have done an extensive research regarding lenders, their policies and procedures to present you a detailed report. This will enable you to examine your options and determine what you qualify for before submitting a formal application. In this way you can see what is available, what it costs and if you can afford it with no risk to your credit history.
Should you default on your loan repayments, your guarantor will have to shoulder the responsibility of paying the loan on your behalf. If he is not able to make these repayments, the lender can then legally have you charged in a court of law.
Early repayments and overpayments
Like any other loan, if you decide to pay off the loan early, it is possible that the lender may request an early settlement fee. In most cases, this is equivalent to one or two months’ interest but not all loans have this early redemption condition attached. It is very important to always check the conditions and terms of the loan closely so that you are fully aware of all the fees applicable.
What to look out for
- To begin with, ensure that you and your guarantor are in a good relationship and each of you is aware of the risks and responsibilities involved.
- If the worst happens and you default on your repayments, the guarantor would have to cover the outstanding debt or they could lose their home.
- If you have a poor credit rating, ensure that you borrow responsibly and work up gradually in order to borrow bigger amounts
- While an ordinary guarantor lender offers loans ranging from £1000 to £7500, it is wise to think critically of the amount you would like to borrow.
Criteria for guarantor loans
For the loan applicants- For one to obtain a guarantor loan, he must be at least 18 years of age and must also be holding a UK bank account from which repayments can be made. You will have to demonstrate to the lender that you are able to afford these repayments; for example, a regular salary.
For guarantors- One must be at least 21 years old for you to act as a guarantor of somebody’s loan and must also have a good credit history that will be checked. One must also be a UK homeowner even though you can still find non-UK loans. For guarantors who are UK homeowners, one can borrow larger sums of money.
Nonetheless, some loans have to be secured against property and therefore if you default on repayments, the guarantor runs the risk of having his property repossessed.