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Guaranteed Loans No Guarantor
Having a bad credit is not always a hopeless situation especially now that lenders are offering different alternatives. One of which is the guarantor loans – a new form of lending that requires another person to cosign the loan. The credit line is beneficial to those who have poor credit remarks and low income but still, some people have something bad to say against it. For this reason, applicants switch to guaranteed loans no guarantor to avoid the twisted views they have. However, once you fully understand what the loan is about and how it works, you’ll realize how beneficial it really is.
This article will debunk some of the myths associated with guarantor loans.
It Offers Extremely High Interest Rates
While at some point it is true, guarantor offers an alternative to reduce your cost. By looking at lenders who offer the lowest interest rate, you are providing yourself a more affordable guarantor loans. After all, the interests they provide are already reasonable. The loan will require another person to cosign with you on the agreement and that person cannot be just anyone; instead, the person needs to have a high income and excellent credit ratings. That other person is already your security, therefore, there’s no need for expensive rates.
It Requires The Guarantor To Share His Bank Details
Lenders will require the borrower’s bank information, but not of the guarantor’s. The primary contact will be the borrower and the guarantor secondly. The role of the guarantor, on the other hand, is undeniably huge but it is only necessary when the borrower ceases to repay the loan. Otherwise, he will not be disturbed and he can go on with his life without providing the details of his bank account.
It Is Secured Against The Cosigner’s Property
Not everyone is eligible to become a guarantor, unless he has an impeccable credit rating, high income, and a homeowner. However, it doesn’t mean that the loan will require collateral from the cosigner. His property will not be used as a security against the loan. The only reason why a lender will require the guarantor to be a homeowner is that of the assurance that he can handle the loan in case the borrower is not able to do so anymore.
It Will Only Provide A Small Loan
Contrary to the false belief, guarantor loans offer a huge amount which can be up to £5000. The amount can be used to cover minor expenses, such as groceries and car repair, and even bigger expenditures, such as home improvement.
It Will Show Up On The Guarantor’s Credit File, Not On The Borrower’s
First and foremost, the loan is under the borrower’s name, therefore, it will not show up on the guarantor’s file. However, if both of them refuse to repay the loan, then their credit scores will be affected. Otherwise, both of them will be fine. The borrower will have the chance to improve his credit rating for a future credit line. Meanwhile, the guarantor can apply for another loan even if he’s already guaranteeing another loan.
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