Guarantor Loans - Are They the Answer For You?

If you have to have a unsecured loan but you have poor credit score, CCJs or a history of credit score problems, it may be difficult to acquire a loan. Sure various cash advance lenders and small cash loan loan firms might be able to help you but usually the amount they can lend is limited to around £500 or so. If you need a larger loan say up to £3000 or so, most organizations cannot help.

However there's a solution.

Guarantor loans are an ideal way of getting credit even mishap turned down in the past. A guarantor guarantees payment of the loan if you ought to be unable to match the settlements unconditionally, so lending providers know they will acquire their money. The loan is still in your name, so it is possible to build up your credit score, but the guarantor is added security for the lender in case there's a problem with paying back the loan.

Who can be a guarantor?

Most issuers require the guarantor to be over 23, a home owner and with a reasonable credit score history. Often parents and other relatives are able to step in to aid, but remember if you default on the loan unconditionally then they'll be ones who are responsible for repayment.

What does the guarantor need to do?

If the loan is repaid on time, then a guarantor doesn't need to do anything. If however there's a problem with the settlements then the guarantor needs to step in to bring the loan current. The loan company will provide the guarantor with a regular statement of account to allow them to check the loan is being paid on time.

Do I need to have credit score checks to obtain a loan?

No, as you could have provided a guarantor it's not necessary to credit score check you, however the guarantor will need to have a good credit history history.

Is a guarantor loan a good option for me?

If you've a poor credit score history then unfortunately there are few options open to you. A number of issuers may be willing to lend to you but at a massively high interest rate as they may be taking a risk. However because guarantor loans are effectively secured then the interest rates are generally quite reasonable making them a good option for mid value loans.