While there is no shortage of loan companies and lenders to choose from in the United Kingdom, not everyone is able to choose from the same range of loan options. This is because many people find obtaining a loan to be difficult and this is definitely the case for people who have a bad credit rating or who have no credit history at all.
This is why there is a need for an alternative to the traditional lending options and for many people, guarantor loans have been a solution. This is an unsecured loan that provides the borrower with the chance to obtain a loan at a more affordable rate of APR. This is possible because the presence of the guarantor provides the lending company with a greater degree of confidence.
If you are looking to be confident about your loan application, you’ll find that a guarantor with a good credit score can make all the difference in finding a loan that is best for your needs.
The amount of money on offer in a guarantor loan will differ depending on the company you apply with but you should find that guarantor loans can be found between £1,000 and £15,000. You will also find that loans are on offer for between one year and 5 years, so if you are looking to spread the payment out over a longer period of time, this is on offer.
Guarantor Loans are based Around a Traditional Appraisal Style
One of the strongest parts about guarantor loans is that they are not a new concept even if many people aren’t aware of them. This style of lending was the way that banks and building societies used to decide on who would be provided with a loan and at which rate. This was the method before computer scoring came into play and you can see why many people believe that this is the best method to determine who should receive a loan.
If you have been struggling with bad credit, a guarantor loan is likely to be the best option for you. They provide you with a higher amount of money than you would normally receive from a loan and they will provide you with a much better rate of APR. These are the two key factors that make a guarantor loan the perfect style of loan for your needs and if you want assistance in putting your finances back on track, you should find that this style of loan is exactly what you are looking for.
Virtually anyone can be a Guarantor
Another very strong aspect of guarantor loans is that virtually anyone can be a guarantor. They need to be of legal age, they need to have regular income and they should have a good credit history, with some lenders asking for the guarantor be a car or home owner. Aside from that, the only issue comes with the fact that guarantors cannot be financially linked to you.
Apart from this, there is virtually no limit on who can be a guarantor for you, so if you are looking for someone to provide you with this support, you should find that there are plenty of people to choose from.
Of course, it is a big responsibility for the guarantor and they shouldn’t rush into the decision. There is a need for the guarantor to know that if the borrower defaults on payments, the lending company will turn to them for money. This is something that will impact oin people’s desire to act as a guarantor. It is a good thing to help out a friend in need but when there is a chance that the guarantor will end up being responsible for huge sums of money, they may not be as willing to come forward.
This is part and parcel of the guarantor loan system and it is always for the best that the guarantor understands what is at stake. Too many friendships have been ruined through financial problems, so make sure that your friendship is strong enough to withstand any problems that may arise from guarantor loans. Hopefully there will be no issues or problems but you should always consider the worst case scenarios and then build from there.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.