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Representative 277.5% APR Representative Example: Borrow £700 and pay £111.27 per month for 12 months at an interest rate of 140% per annum (fixed). The total charge for credit is £635.24 The total amount repayable is £1335.24. Representative 277.5% APR (variable). Your APR rate will be based on your circumstances.
If you are looking for reliable financing to address certain urgent needs like car repairs and home improvements, there are many financial options that you can look into. There are short-term unsecured loans like payday loans that are perfect for individuals who are looking to get some quick cash to tide them over the next payday or secured loans if you want to borrow larger amounts. Another viable option comes in the form of guarantor loans if you want to enjoy accessible and flexible financing for higher amounts.
The Beauty of Loans With A Guarantor?
The beauty about guarantor loans is that it can help you get the money that you need even if you can't obtain credit using your own name alone. The idea behind the financial option is pretty straightforward. A second person - normally a relative or close friend - agrees to be your guarantor. The person promises that, should you miss or default from your payment responsibilities, he will personally cover them for you. Because of your personal relationship with the Guarantor and his agreement to share responsibility for your debt, it makes it easier for lenders like (website name) to grant you the loan that you need.
Guarantor Loans UK and Why they Could be Perfect For You
Among the numerous financing options available today, guarantor loans the UK could be the perfect one for you and there are several reasons why. One is that it offers a number of great advantages, especially if you don't have anywhere else to turn for financial help. You can expect guarantor loans to be:
1.) Easily Accessible
Guarantor loans were made for borrowers who have difficulty borrowing from other traditional sources like banks and credit unions because of their poor credit standing. As long as you find someone who meets the lender's "guarantor: criteria, it would be very easy for you to apply for the loan even if you have a bad credit history or one that is non-existent at all. Generally, your Guarantor must be:
- A resident of the UK and must be aged 21 to 75 at the start of the loan
- Possess a good credit history
- Have a UK bank account with a debit card
- Have a monthly income
- Be financially independent of you
It is still important, however, that you can afford to make the repayments but the chances of getting the loan are much higher.
2.) Best In Larger Amounts
Because there is a guarantor that will offset the risk involved when you miss out on your payments, lenders normally offer guarantor loans UK in larger amounts. If your guarantor is a homeowner, the amount you can borrow will be even bigger than if they were a tenant, making it a viable option if you need money for major expenses or purchases.
3.) Approved Quickly
The entire process of taking out a guarantor loan is pretty quick. Normally, if your application meets the lender's criteria, the approval and money transfer can be completed in less than 24 hours. If you have sourced out a potential guarantor, are currently in need of an unsecured loan, and have a rather unappealing credit score, a guarantor loan could be your lifesaver.
4.) Longer Repayment Periods
The time frame in which you have to repay the loan will vary depending on the amount that you borrowed and your capacity to repay it in the coming months. Guarantor loans, however, are generally flexible with some loans lasting up to seven years if necessary.
5.) Minimal Default Rates
Compared to other financial products, guarantor loans create far lesser difficulties. This is because the loan offers flexible repayment schemes that will give you more time and space to make the appropriate payments. And because your guarantor shares an equal burden in the repayment, defaults are usually minimal.
The Best Interest Rates on Guarantor Loans Online
The cost associated with taking out a guarantor loan is typically higher than a standard bank loan due to the risk that the lender needs to carry but lower than most unsecured types of loans. You can expect interest rates to hover around 40% to 50% APR (Annual Percentage Rate), depending on the lender.
No Guarantor Loans
If it is simply impossible for you to source out guarantor, there are other financial options that can be found by a reputable broker like Pick-A-Loan. These no guarantor loans include:
- Personal Loans - Personal loans are unsecured forms of loans which means you won't need a property or any other asset to get one. The maximum amount you can borrow is at £25,000 and will come at a fixed interest rate.
- Payday loans - Payday loans are great cash advances and are very easy to obtain making them great solutions to short-term money problems. You can borrow small amounts from £100 to as much as £1000 which you will need to pay typically on your next payday.
- Logbook loans - A secured type of loan that uses your own vehicle as collateral. Can offer large amounts, typically 50% of your vehicle's trade-in value, and can be availed easily even for people with bad credit.
- Doorstep loans - Very convenient type of loan. You can apply for the loan and have the money delivered right in front of your doorstep by a friendly local agent.
Bad Credit Loans Without Guarantor
If you have a bad credit and don't have someone who can back your name up as a guarantor, it is still possible for you to avail for a loan. There are numerous reputable lenders that offer bad credit loans no guarantor that will give you the money that you need even if you have a bad credit rating. As a matter of fact, the no guarantor loans mentioned above are all of them. Payday loans, for instance, won't purely dwell into your credit rating but on your ability to make the proper payment. As long as the lender sees that you have the ability to make the proper payments very bad credit doesn't have to be an issue, he will normally make it a point to find a suitable deal for you and your current situation.
- Guarantor loans are secure loans that help you to borrow large amounts of money that your name alone cannot get for you.
- With a guarantor or collateral, lenders are more confident to give out large sums of money to borrowers than when they come by themselves bearing only good credits.
- They can be easier to access because they do not involve rigorous credit checks; lenders are more confident because of the presence of a suitable guarantor.
Short Term Loan FAQs
Are instalment loans and guarantor loans the same?
In some ways, they are the same but they still possess certain differences that depend on the policies of the lender in question. Instalment loans like guarantor loans can give out large sums of money to borrowers over a long period. But there are direct lenders nowadays who are willing to give large sums to borrowers who do not necessarily have strong guarantors. So that's the little difference between the two loan formats.
What are the interest rates?
Guarantor loans always come with low-interest rates because of the presence of a guarantor who secures the loan. This is the beauty of this form of lending when you need to borrow large sums. Not only do you have enough time to pay the money back, but you also have very low-interest rates to deal with it in the process. Once you adhere strictly to the payment plan, you will never have trouble taking up a guarantor loan with any of our lenders.
What does my guarantor need to present before I am given the loan?
Guarantors help other people that they trust to secure a mortgage or a loan. In other words, they'll stand-in for the person and take up the loan repayment if he/she defaults on payments at some point during the duration of the loan. For a lender to accept a guarantor, they must have proof of a regular income, they must be able to prove that they have solved their financial problems in the past and they can take up the loan repayment without necessarily disrupting their daily financial activities. They must also reside in the UK and be of an official age.
Can my guarantor cover more than one loan?
In general practice, a guarantor can only guarantee one loan at a time. However, if you wish to take up multiple loans and your guarantor is also willing to go along with your plan, some lenders who will be willing to bear the risk. But you must take time out to consider whether you need to operate two loans at the same time. If there is no dire need for taking it, then it is better that you stick with just one loan at a time.
Can I change my guarantor during the duration of the loan?
There are instances where this is possible if your lender is willing to renegotiate terms. Here are a few things that you should do if you wish to change your guarantor:
Speak with your guarantor and let them know why you have made the decision to remove them as a cosigner to the loan or why they wish not to guarantee your loan anymore.Schedule a meeting with your lender to renegotiate new terms with your new guarantor.Ensure that you are making the right decision.