What are guarantor loans ?

A guarantor loan is used to refer to money lent out to a borrower on basis that you will provide a guarantor. It is considered as an unsecured form of loan. The guarantor is usually required to co sign the loan and stand as support for the borrower. The idea of a guarantor loan is borrowed form a long tradition that has been standing for centuries. It has been modified and brought back to life as guarantor loan offers. The sole foundation of guarantor loans is built on trust. As long as your guarantor trusts you to pay back the loan, the lender is willing to offer you the loan amount.

The UK has plenty of lenders offering guarantor loans to lenders at good rates. As long as the borrower can find family, friends, or colleagues willing to cosign on the loan undertaking, they can easily get a loan. A good guarantor assures one a loan approval irrespective of one’s credit score.

What are its requirements?

The requirements of a guarantor loan are quite simple. You as the borrower should have a purpose for the loan and you are required to find a guarantor. When these two are set in place, then you can make an application for a guarantor loan. You need to make sure that you qualify for the loan in order to access it. The eligibility criteria for guarantor loans are quite simple when compared to that of other loans.

As a borrower, you need to satisfy some of the most essential requirements for you to be considered as an eligible candidate. You need to have in place:

  • A source of income, this could come as a full time job or part time work.
  • You need to meet the financial requirements of the lender which means you need to fit in their affordability bracket.
  • You need to be a UK resident legally staying in the region
  • You need to be of age which is 18 years and above
  • You need to have a bank account

Who is an ideal guarantor?

A guarantor is an individual who stands by your loan. This individual is required to co sign on the loan forms along with you. In case of any difficulty in paying back the loan, the guarantor is expected to contribute in making the loan payments. However, in cases where the borrower has been making timely payments for the loan, the guarantor does not have to do a thing until the completion of the loan. On completion, the guarantor will be notified of the successful payment of the loan.

There are numerous characteristics that are sought after in a guarantor. These include

  • 1. One who is a legal resident of the UK region
  • 2. One who has a stable type of employment
  • 3. A responsible individual of age 21 and above
  • 4. One with a good credit history in the borrowing field

Who can stand in as my guarantor?

There are no limitations as to who can be your guarantor. As long as the individual meets the eligibility criteria stated above, he is a desirable candidate as a guarantor. You can select a guarantor form any walk of life as long as they meet the characteristics required of a guarantor. You can have a family member, friend, neighbor, landlord, workmate, or supervisor stand in as your guarantor.

If you select an individual who is a homeowner as your guarantor, then you have a higher advantage. Some lenders require the guarantor to be a homeowner while others don’t. Those who require a homeowner have larger amounts in loan options to offer their customers. A homeowner as a guarantor makes it more possible for you to secure the loan that you are applying for.

Who are guarantor loans built for?

As long as you are the right candidate, guarantor loans can prove to be very ideal for you. Guarantor loans are mainly designed to help individuals who have a need for loans. However, they are best suited for those who have a poor credit record. The terms of this loan are designed to allow those with a poor credit record get funds and repay in a manner that will allow them to rebuild their credit reputation that was tainted.

It is also good to remember that there are many different lenders available offering guarantor loans should you decide to apply online. If you find that one is not good enough for you, shop around and you will most likely get one that has been built to offer you just what you need.