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Guarantor Loans with Low APR
Having a bad credit score is not only embarrassing; it is also frustrating since it hinders approval of the loan application. Luckily, there are lenders willing to provide financial assistance even to those who have made mistakes in the past. A guarantor loan, for example, is a type of loan designed for bad credit borrowers or those who have never borrowed from a financial facility before.
Basically, the loan seeker needs to find a guarantor who will back him up in case he’s not able to repay the loan anymore. A guarantor loans non homeowner will not demand any collateral, however, it will ask the borrower to look for another person that will co-sign the contract. Nevertheless, having a guarantor doesn’t spell 100% approval. Given below are a few guidelines on how you can increase your chance of getting approved.
Provide A Good Guarantor
As mentioned above, there’s no need for collateral to secure the loan; however, a guarantor is necessary as he will shoulder the loan amount in the event of default. As a primary factor, it is necessary to look for a guarantor with excellent credit rating and good income. The co-signer should also have a clear financial history, meaning, there should be no declared bankruptcy in the past.
Repay On Time
Although credit ratings will not entirely affect the decision, the lender will still utilize it to know what kind of borrower you are. If you have an extremely poor credit rating, there’s still a chance for your loan application to be declined. However, you can still provide a proof that you are capable of repaying the loan back, such as your income. Now, once you’re approved, you have to be true to your words and become responsible this time. Otherwise, your guarantor will suffer bad credit rating and this will not only put a strain on his credit score but to your relationship as well.
Know The Risks
It is important that both of you and your guarantor know the risks and responsibilities related to the loan. To avoid the unwanted default or late payments, find a loan that is affordable. Guarantor loans low APR is cheaper and easier to settle, therefore, you’re certain that you can repay it on time. As for the guarantor, it’s best to consider a family member or a friend as they are the ones who know you personally.
Choose The Lender Carefully
Guarantor loans uk, no matter how cheap, are not for free. Therefore, you need to find a lender worth paying and doing business with. Choose a lender carefully by asking several lenders first. Before affixing your signature to the contract, consider at least three to five lenders and compare each term and conditions. Even if you’re desperate for money, you still have the right to select the best one. After all, your guarantor will help your application to be approved.
Keep In Touch
Communicating with the guarantor doesn’t stop after your loan application is granted. Since his name and signature is in the agreement, it’s just fair to give him an update about the loan. Discuss if there are problems with the payment as this will help the both of you resolve the problem quickly.
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