Guarantor loan is a type of unsecured loan that require you to find a second person that acts as your guarantor. This type of loan is ideal for people with bad credit score or limited credit history and are struggling to get approved for a loan from a traditional bank. It is easy to get approved because you don’t have to provide a lot of paperwork. Guarantor loan is suitable for you if you need a loan of more than £1,000 urgently to cover temporary expenses.
You will be able to borrow a higher amount than the loan amount usually approved for people who take out a bad credit loan. The loan amount that you can borrow through a guarantor loan is in between £1,000 up to £7,500 and the repayment term is between 1 – 5 years. The APR interests for guarantor loans is usually in the range of 39.9%-59.9%.
There are several criteria that the guarantor must meet and these criteria are usually stated at the lender’s site. Basically, anyone except your spouse that meet the criteria can be your guarantor. A good candidate can be a family member such as parents and siblings. It can also be a close friends or coworkers whom you have known for a long time.
The minimum age level is in between 18-75 years old and the person must hold a bank account in good standing. The person who guarantee your loan must also have good credit score and meet the minimum income level. Many lenders require the guarantor to be a homeowner as it reduces the chances of the guarantor from disappearing in the event that the borrower falls behind the bill payment. The lender will perform a background check that is similar to one conducted by the bank. Documents such as bank statements, and ID card.
The guarantor will be responsible for making the repayment on your behalf if you fail to submit payment for the bill on the due date. This is why becoming a guarantor is a serious decision that is to be made carefully after taking into account all the implications. You should talk to the person who is going to be your guarantor about the requirements so that they are aware of the responsibility that will fall on them. If you know a good friend who is always willing to help you and have a regular good income, you can ask him to be your guarantor.
Before applying for guarantor loans, you should work out all your necessary expenses and deducting them from your monthly income to see how much is left for repaying the loan. It is important to borrow only the amount that is needed for covering your expenses. If you plan to borrow again after finish repaying the loan, you might as well borrow a larger amount so that it will be more manageable in the loan repayment. The guarantor loan may have different types of fees like application fee and late payment fee. Many guarantor loan providers do not charge early repayment fee on borrowers who decide to repay the loan early.
The fastest way to apply for a guarantor loan is to fill in your personal details the online loan request form such as name, contact, address and employment. In the application form, you can provide details about the person who is going to be your guarantor. The representative will quickly review the loan and you can expect to receive a loan decision within a few hours of submitting the loan request form. The funds can be released on the same day the loan is approved if the loan approval decision is sent to you before 5 PM. The majority of the loan applications are approved within 24 hours.