What is a Guarantor Loan? In periods of recession it is common for many people to have a bad credit record, which can make further borrowing difficult. Guarantor loans are becoming more popular in the UK and they are a timely solution for those who are having difficulties obtaining finance. Bad credit guarantor loans will allow you to access borrowing where another person, who is more financially credible, stands as a guarantor. Guarantor loans lenders generally advance amounts ranging from ÂŁ500 to ÂŁ6000. A guarantor loan is categorised as unsecured credit, and repayment periods are usually between one and five years. They are a good option for people who have been declined finance repeatedly because of a bad credit history or because they havenâ€™t built up a credit record. Additionally, they are often cheaper than other forms of unsecured finance. Compared to payday loans, for example, guarantor loans have lower interest rates and there are usually no upfront fees or arrangement charges to be paid. Higher amounts are also granted and it is possible to improve your bad credit history providing you do not default on the repayments. This will make it easier for you to obtain finance in the future. Eligibility for Guarantor Loans with Bad Credit Guarantor loans in the UK have specific requirements for approval. The age stipulation is 18 years old and above. Additionally, the borrower should have a bank account in the UK because this is where payments will be collected. The APR for UK credit guarantor loans may be slightly higher than for other types of borrowing that could be obtained with a good financial status, but this is primarily because of the higher risks involved on the part of the lender. The person borrowing the money must also have somebody who is willing to stand guarantor on his behalf. This has to be someone who is not financially connected i.e. they do not share the same bank account or mortgage. However, they can be related and parents often take on this role for their adult children who may not have built up a credit record yet. If you think a guarantor loan is the best option for you, then you should take certain aspects into account to make sure you get a good deal. Firstly, compare interest rates, and make sure that you are comparing like for like e.g. by looking at the APR or at the total interest paid. Secondly, find out if there are any extra charges that you may have to make.
There are various websites that will allow you to find a good deal by entering search terms such as â€˜guarantor loans onlineâ€™, and many offer a fast and efficient service. Everything can be taken care of online, from making the initial enquiry, to filling in your application and finding out your payment terms and fees. This type of finance is a good alternative if you are in need of extra cash but cannot easily obtain it in any other way. Be careful to shop around though and find a company that specialises in lending to people with a poor credit history. These types of companies will have good market coverage so they will be able to help you access the best deals. Back on Track Loans offers various types of lending for people with a poor credit history including guarantor loans. Because Back on Track has more than 250 lending options available the staff should be able to find a low cost product to suit you. Additionally, we offer other methods to help you reduce your monthly outgoings. These include Debt Management Plans and IVAs. Therefore, if you are struggling with bills we should be able to find a solution to help you. 620 words