When you are in need of a loan for whatever reason, there are different options that you can choose from and one of these is guarantor loans. The type that you choose is often dependent on your past credit history and the amount of the loan.
Guarantor loans are a popular option for people that have yet to fully establish their credit.
Getting approved for a loan with a very bad credit history is almost impossible, but a guarantor loan allows you to build your credit at the same time.
What are Guarantor Loans?
Guarantor loans are often referred to as buddy loans. This is due to the fact that another person must also sign for the loan and be obligated to pay.
This means that there is more than one person responsible for repayment of the loan. It is a type of unsecured loan, which means that no collateral is needed. However, it is a requirement that another person be willing to guarantee the loan.
The normal amounts for guarantor loans can range between 1,000 and 7,500. The risk of the borrower is why guarantor loans need to have a second person.
George Banco Loans can provide loans up to 7500 and can be repaid back up to 5 years. They have a rate-dropper product where the interest rate reduces each year if you make your payments on time.
Another big plus with them is that when you apply, they try to give you a normal unsecured personal loan first of all, but if that fails, then they offer you a guarantor loan instead.
Who is a Guarantor Loan For?
Many people can qualify for a guarantor loan. The people that are the best applicants for this type of loan include those that want to work at building their credit history or those that want to improve it.
If you have bad credit, this is a loan that you can be approved for, since there is someone else on the loan to guarantee it.
If you need to get access to cash fast and need a loan with a quick approval process, this is also an ideal option.
Guarantor loans are designed to be the simple solution and are relatively easy to be approved for.
Who Can be a Guarantor?
When you are trying to get a guarantor loan, you need to have someone that will be approved as a guarantor.
This is someone that is over 18 with established credit. Someone on the application for the guarantor loans must have good credit history and credit score that minimises risk.
Having a bank account and a minimum income or savings are also requirements that a guarantor must meet.
In the event that the borrower of the loan does not pay, the guarantor is responsible for taking over the payments.
If payments for the loan are repeatedly made late, this could also negatively impact the guarantor of the loan.
Are you finding it hard to be accepted for a loan? Is your credit score not great and it is making being accepted for a loan difficult? Then Guarantor Loans could help.
With guarantor loans you can borrow up to 7,500, or possibly more depending on your circumstance. Borrowing terms can be for up to 5 years making your repayments a lot easier to manage.
Although personal loans and Guarantor Loans are similar, there are a few differences. With a personal loan you apply for the loan by yourself. A personal loan is suitable for those that have a reasonable credit score.
However, if you have a poor credit score and are finding it difficult to get accepted for a loan a guarantor loan may be the answer.
When you apply for Guarantor Loans you will put forward someone’s name as being a guarantor on the loan. This person can be a close friend or someone in your family that is willing to be named as a guarantor.
The requirements of a guarantor usually means that they should not be financially linked to the applicant, and willing to take on the debt should the applicant fail to keep up with their repayments as agreed.
When applying for guarantor loans the guarantor should have a good credit score, and ideally be a home owner. As a guarantor it is essential to understand that should the applicant not keep up with their repayments the loan company will go to you as named guarantor to pay back the debt.
By taking on this responsibility it could have an impact on your own credit score. If however you are in the position to pay off the remaining debt both parties credit scores will be unaffected.
Once you have decided on who will be guarantor on the loan and they have agreed to be so the application process can begin. The application process for a guarantor loan is very simple.
The application form for guarantor loans will ask basic information about the applicant, and the guarantor. Once this is done and the checks have been made you will receive confirmation if you have been approved.
If successful, you will receive your loan through your account to use for what you require it for. It really is as simple and as straightforward as that.
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