If you have a bad credit score or low deposit getting a loan can be difficult. That s where a guarantor loan could help.
No fees or early settlement penalties.
Designed for customers with low credit
Guarantor loans are becoming increasingly common and offer an alternative form of borrowing to those with a poor credit history.
There are many specialist guarantor loan companies so it s worth shopping around to find the best rates.
How do guarantor loans work?
When you apply for your guarantor loan you are supplying the details of someone who will pay off your loan should you default on your payments.
This reduces the risk for the lender, meaning they are able to offer you lower interest rates than you could obtain elsewhere.
Your guarantor will only be called to step in as a last resort move and are not normally involved in repayments.
Who can be your guarantor?
A guarantor is usually a close friend or family member who trusts you to keep up with your repayments, but it can be anyone.
Whilst they can be related to you, they cannot be financially linked to you as your spouse.
Typically, guarantors have to be aged over 21 with a good credit score.
As they will have a credit check to confirm that they have a good credit score, they will need to provide identification, proof of address, bank statements and other details.
Often they will need to be a UK homeowner too. If the lender requires security, they need to have enough equity to match the value of your loan.
Guarantor loans borrowing with bad credit
Guarantor loans are targeted at those with bad credit scores, namely if you have poor credit and have been turned down by mainstream lenders