If you are looking for a Guarantor loan, you may be in a position where you have bad credit, or you just want a cheaper interest rate alternative. Here at Personal Loans Now, we can help you with Guarantor loans with instant payout and provide you with a solution that you may have found difficult elsewhere. The reasons why choosing us to apply for Guarantor Loans include:
Fast Payout to You
Fully Online Application
Guarantor Loans Low APR Rates
Ideal for Bad Credit Applicants
What Is A Guarantor on A Loan?
A guarantor on a loan refers to the primary borrower who chooses to nominate a family member or friend to act as a guarantor for the application. The guarantor will agree to back up a borrower’s loans if they cannot make a repayment due to unforeseen circumstances. In most cases, people usually need to apply for guarantor loans
if they have no recent credit history or suffer from a bad credit score and want the ability to be able to get accepted in future.
How Does Guarantor Loans, Direct Lenders Work?
Guarantor loans work very similarly to an unsecured loan
, but with the added benefit of loan security. If you choose the option of a guarantor loan, you are still responsible for making repayments on time and regularly and at Personal Loans Now, we undertake the appropriate affordability checks
, ensuring this will be a possible option for you. However, with the appointment of a guarantor, it will give you credibility when applying and provide the lender with a guarantee
if a financial issue arises, especially if you are applying with a limited credit history or with a bad credit score. However, making plans for the unexpected can be difficult, so if in the event you do default on a loan, the creditor will approach your guarantor to make arrangements for repayment instead.
Guarantor Loans with Instant Payout – Who Can Be My Guarantor?
When deciding on who to act as your guarantor when applying, you will need to ensure the following criteria is met:
- You could choose a close relative, friend or co-worker
- A guarantor cannot be a spouse or someone you share a joint account with
- The guarantor must be in current full-time employment
- They should have a good credit history
- The Guarantor must also be over the age of 21 (although some lenders may accept over 18 or only over 25, whilst others will not accept guarantor’s over 75 years old)
Can My Guarantor Have A Poor Credit Score?
Unfortunately not, simply because Guarantor loans are tailored towards the bad credit borrower. As a lender, we would need to ensure that at least one of you has a good credit score. Because of our commitment to providing safe and responsible lending, we want to ensure that your guarantor will be able to repay your loan if you happen to default. We have to ensure they will not be put under any financial strain also and can afford to repay the loan. We do this by thoroughly checking you and your guarantor’s credit report and current affordability. The FCA
recommends that we perform credit checks as part of their regulations and we are fully committed to doing so.
Can My Guarantor Be A Non-Homeowner?
You or your guarantor do not need to be homeowners but be aware that interest rates can be more expensive if you are both tenants. We can also offer homeowner loans in the UK
, that have higher acceptance rates and are an alternative option if you meet the eligibility criteria.
Your guarantor is taking on a big responsibility that potentially affects their finances and credit report. Before signing, make sure your guarantor is aware of the risks and their responsibilities.
Top 5 FAQ’s on Guarantor Loans UK
Yes, you may be able to borrow larger amounts when you have a guarantor as the risk of repayment is much lower than a no guarantor loan. However, we still ensure affordability checks are run after you submit your application to ensure that you can still afford the larger amount and are able to make your repayments on time.
Guarantor loans at Personal Loans Now are usually cheaper than other unsecured cheap personal loans
we provide because there is a much lower risk for us overall. Our interest rates are set between 35.5% – 99% and the amount of interest you have to repay will vary depending on the amount you choose to borrow and on you and your guarantor’s credit report and affordability.
Here is a representative example; If you borrow £10,000 for 24 months, then 24 monthly repayments are needed of £578,37. The total repayment is £13,880.88, interest rate p.a. (fixed) 39.7%. The representative APR is 39.7%. You can choose to repay Guarantor loans as early as you want to, enabling you to save on the total amount of interest. Warning
: Any late repayments can cause you serious money problems. For further help, please visit moneyadviceservice.org.uk.
The repayments work in the same way as any other unsecured loan. As the person who has taken out the guarantor loan, it is your responsibility to repay this. You are expected to repay in your instalments detailed during the application, and if you are struggling with your repayments, it is best to get in contact with us as soon as possible before your instalment is due, so that we can arrange a suitable repayment plan which does not involve your guarantor. Your guarantor is there in the rare circumstance that you cannot afford to make repayments
If you cannot find a guarantor, then we may be able to offer other loan options that may suit your financial situation better, including:
- Unsecured loans for bad credit – These loans are widely available throughout the UK. They are usually a bit more expensive than regular secured loans, as the lenders will need to balance the risk involved with lending. However, they may provide higher rates of acceptance for people with a bad credit rating.
- Speak to your bank or building society – Your current financial provider may be able to offer a good credit option that is tailored to your personal circumstances. Sometimes, all you have to do is ask and you may find what you’re looking for.
- Credit unions – Credit unions offer a real alternative to banks, for those who are looking for credit outside of the traditional methods. To qualify, you’ll need to become a member of the credit union that interests you. These institutions are also much more understanding and supportive of those in financial difficulties as they are not-for-profit organisations with the sole purpose of helping their members; search for a preferable Credit Union today.
- Credit cards – If you’ve been declined a credit card with your own bank, it doesn’t mean you can’t still apply for a credit card with other banks or building societies. However, keep in mind that if you have a poor credit rating, you may have difficulty finding a good credit card deal with low interest. However, there are credit cards dedicated to people who have bad credit.
At Personal Loans Now, we always encourage you to do your own research into all the available options before signing any agreement. In some circumstances, Personal Loans Now Guarantor loans may be the perfect option for you, but it’s always best to check the current market.
APR rates are usually lower with Guarantor loans because the risk of repayment is lower as you have a guarantor backing your loan. It is likely to be a lower interest rate than other unsecured personal loans without a guarantor.
Guarantor Loans, Direct Lenders from Personal Loans Now
At Personal Loans Now, we are here to help homeowners or tenants; apply today for a loan amount of between £2,000 and up to £25,000. If we can’t help you as a direct lender, we’ll then work with Monevo to compare over 50 authorised lenders in the UK that can find you the best guarantor loan available. Lenders on Monevo include Amigo, Shawbrook Bank and many others, so don’t let a bad credit score dishearten you – apply today online and receive an instant decision and, if approved, your low-interest loan payout today!
Last modified: November 1, 2019