One of the main benefits of a guarantor loan is that someone who needs a loan, and may not qualify due to weak, poor, or no credit, can be approved and receive the loan.
The interest rates on guarantor loans are much lower than other bad credit loans, such as payday loans.
The loans allow flexibility in repayment, as they can be paid off early, in addition to terms as long as 60 months to aid in the affordability of monthly payments.
Typically borrowers can borrow up to £7,500, which is more than if they were to get a payday loan or other short-term form of borrowing.
Having a guarantor allows the lender to approve the loans quicker, in some cases within 24 hours, and once approved, the money can be transferred to the guarantor within hours.
Weak, poor, or no credit not an issue.
Lower interest rates than payday loans and other bad credit loans.
Longer terms of up to 60 months/five (5) years.
Money transferred quickly.
Help to rebuild poor credit.
While guarantor loans are a good way for someone to rebuild their credit, or start having credit, there are a few things as a borrower you need to look out for, and be aware of.
Most guarantor lenders do not charge a fee to apply for a loan. You may wish to shop around if one does charge a fee.
By having someone guarantee a loan, should the borrower default, the guarantor is responsible for payment. This has the potential of placing a strain on the relationship.
While a guarantor loan is processed and underwritten to ensure the borrower can afford the repayments, the borrower has a responsibility to ensure affordability as well, not applying for additional loans, or unwise spending causing payments to be missed.