What Exactly is a Guarantor Loan?
What's The Skinny The Guarantor Loan
What you should know about guarantor loans is that they are just about as expensive as non-guarantor personal loans, however, the one main advantage that they have is that lenders are more likely to approve your loan application. Essentially, the principle behind the loan is that if other people trust you enough to become a guarantor to your loan, then lenders should trust you too.
Can you apply for guarantor loans without being a homeowner. Read on to find out.
Looking For Emergency Funds?
If you need a quick infusion of cash because of some emergency situation, there are many lenders out there who would be more than willing to lend you the money, even if you have a low credit score. And they would be even more willing to do just that if you had a suitable guarantor to guarantee your loan. You might think you don’t have a loan guarantor among your family and friends, however, did you know that ten percent of all borrowers actually thought the same when they first started their loan application? It’s really just a matter of mustering the courage to ask people to become a guarantor.
Please Note – No matter how dire your financial situation may be, do not be tempted to look to a payday loan as a quick fix - http://www.theguardian.com/money/2013/jun/27/what-is-a-payday-loan
Lenders Are Now Prepared To Take More Risks
The thing is if you have the capacity to pay, and you are the kind of person who repays loans, then you won’t have a problem having people help you out. As for the lenders themselves, they really couldn’t care less. If your credit score isn’t too way down there at the bottom, they will approve your loan because they understand that a missed payment does not necessarily mean a mangled state of finances.
The good thing about guarantor loans is that they are easy to get just like non-guarantor loans. And you can use them for whatever purpose because they are personal loans. But how does the process work?
It works this way: You apply for a loan with a finance broker. Lenders will then approve your loan in principle. You will then need to send your loan documents along with information as well as supporting documents on your guarantor. Your loan is approved, you get the money.
Fast Resolution For Applications
If the process sounds simple enough to you, it is. Take note, we said that SEVERAL LENDERS will approve your loan in principle. Approval usually takes only ten minutes as the details and documentation are only worked out later. What you want to do after your loan is approved is to compare the terms and conditions of the different lenders.
How much you can get in loan amounts and how much you pay in interest rates really vary from lender to lender. At one finance broker website we checked, you could borrow 100 to 700 British pounds for an average APR or Annual Percentage of 304%. On the other hand, you could also borrow 500 to 12,000 sterling for an APR of 44.9.
How much a lender actually charges will be contained in the email response to your loan application. If it doesn’t, make sure to ask the lender’s representative for detailed information on the interest rates, the fees you need to pay, and other details that will affect repayment.
If you would like some advice on managing your money in the most effective way possible, check out the following video: