What is a Guarantor Loan and How Can One Help You?
There are lots of different types of loans that you will have to choose from, but not all of them are going to match your needs. Guarantor loans have become a popular option among those with bad credit, and it’s certainly something that you should at least consider. You will find that there are many reasons to think about taking out one of these loans, and it’s a good idea to research them thoroughly before making up your mind. Getting a guarantor loan could be one of the best decisions you ever make.
How They Work
Guarantor loans are specifically for those who have bad credit and cannot get approved for a traditional bank loan. If you have become frustrated with your inability to get the loan you need, it is important that you look into this type of loan because of how helpful it can be. These loans are usually given out by private lenders, though some banks given them out as well.
There aren’t many financial requirements for those who apply for a guarantor loan, but the requirements are much higher and extensive for the person who will be acting as the guarantor. You will need to be aware of what these requirements are before you move forward.
Requirements for Getting a Guarantor Loan
The lender won’t take a very close look at your credit or financial situation as the borrower, but they will require the guarantor to have good credit and adequate income. It can be a bit challenging to find a qualifying individual to act as the guarantor because of the stringent requirements, but you might know someone who can help you out. The guarantor’s credit needs to be good but not necessarily great. They also need to make enough money to pay off the remainder of the loan if you can no longer make payments.
It is also imperative that you look for someone that you can trust. If you suddenly become unemployed or injured and cannot work to make payments on your loan, you will depend on them to pay it back for you. If the guarantor does not pay back the loan in place of the borrower, both the guarantor and the borrower’s credit will be negatively affected.
The last thing you want is for your credit to suffer because you chose the wrong person to act as your guarantor. This person must be at least over 18 years of age and be a legal UK citizen as well. These are just a couple of the most basic requirements for anyone to get a loan of any kind.
Boosting Your Credit Rating
If you want to increase your credit score as much as possible, getting and paying off a guarantor loan can be precisely that. Many people actually take out these loans with the primary purpose of improving their credit, and it’s not a bad idea at all. Another great thing about these loans is that filling out an application will not count against your credit at all like it might with other types of loans. This is because the lender will not run a credit check on you.
Keep in mind that you will only be able to improve your credit rating with a guarantor loan if you pay it back on time. If you are late paying back the loan, your credit will suffer. You will need to avoid this at all costs, because it will be a major strike against your credit.
Applying for a Guarantor Loan
Once you go online and start looking into lenders who give out guarantor loans, you will quickly discover that you can apply for one on their websites. Applying for this type of loan has never been so easy, and it’s not a very time consuming process at all. If you want to get the money you need as quickly as possible, you will need to fill out an online application right away.
There are some things that you should remember when filling out an online loan application, such as that it’s a good idea to get organized before getting started. You should get your proof of income, address and other documents you will need before you begin the application process. This way you will be able to get through everything as quickly as possible.
While it’s true that the lender won’t take a very hard look at your financial situation, it’s still important to submit online truthful information on your application. The last thing you want to do is put anything you know is false on your application, because the lender will automatically reject it.
What to Keep in Mind
You should always keep in mind that approval is never guaranteed with a guarantor loan, so don’t give your hopes up. There is always the chance that your application will be rejected, as there are many different things that are considered before approving someone. The more you learn about these loans, the better your chances will be of getting one. The most important thing to keep in mind is that you want to find a guarantor that is qualified and trustworthy. You definitely will not want to choose just anyone for this role, because they might need to take over payments on your loan at some point.
Finding a Good Lender
It is crucial that you find a guarantor lender that will not rip you off in any way, because there are some less than trustworthy ones out there. You will need to research some of your lender options before making a decision on one. The time you spend getting information on these lenders will really help you with getting the best deal on the loan you need. Guarantor loans are given out by lots of different lenders, but you will need to make it your goal to find the right one. You can save a lot of money by doing this research.