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Guarantor Loans with a Non Homeowner
Guarantor loans are almost new in the market, however, it is swiftly acquiring popularity. Bad credit borrowers, who are hopeless about procuring a new line of credit, benefit from this type of loan. Unlike other types of loan, the borrower doesn’t need to have a good or excellent credit rating, however, he needs to have someone who will act as the guarantor.
If you’re planning to apply for this type of loan or you want to know more about it, this article will shed light on the concerns that are frequently asked by the loan seekers.
What Is A Guarantor Loan And How Does It Work?
A guarantor loan is created to people with bad credit histories, ensuring that they can meet their financial obligations easily. Unlike other lenders who see them as high risks, this loan can lend up to £5,000 as long as they can provide a guarantor. The guarantor will not be asked to provide collateral, however, he needs to co-sign and back up the borrower. His primary role is to repay the loan back in case the borrower defaulted. Therefore, the guarantor should have a disposable income and an excellent credit rating, this will help you to get the best guarantor loans.
What Are The Criteria For Being A Guarantor?
A guarantor can be anyone, however, because of his huge, challenging role, it is recommended that he is a family member or a friend of the borrower. To be considered as an eligible backer, the borrower, and the guarantor should not have any shared credit card accounts, mortgage, bank account, or other credit. It is also important the other person is employed in a good organization, has never filed bankruptcy, or has not received any court actions. Since there will be no collateral involved, the lender will demand that the guarantor is someone who has a flawless credit history to ensure that he is not a high risk.
What Is The Role Of A Guarantor?
Basically, the role of a guarantor is easy as long as the borrower is responsible. Aside from co-signing all the necessary loan-related documents, he will provide bank statements. Other than that, he will not do anything. However, in the event of default, the guarantor will shoulder the loan and settle it because the borrower fails to do so. Therefore, before agreeing as a guarantor, you should know your roles and responsibilities.
What Are The Requirements As A Borrower?
As an applicant, you only need to comply with a few prerequisites, such as legal age (18 years old and above, proof of residency, bank account, personal information, and employment details. There’s no need to worry about collateral, such as a home since tenants can apply for the guarantor loans nonhomeowner. The credit score is not an issue as well although the lender will use it for reference. Nevertheless, it will not be utilized to make the decision.
How Soon Can You Get The Money?
After all the requirements are submitted, it can be a guarantor loans same day payout. Usually, the loan will be transferred to your bank account in as fast as 7 days; however, there are lenders who can provide the cash within the day.
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