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What You Need to Know About Guarantor Loans

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 Guarantor Loans

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.) 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 Interest Rates on Guarantor Loans

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.

 

Loans for Bad Credit no 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, he will normally make it a point to find a suitable deal for you and your current situation.

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