A close friend or family member, someone who feels that you will repay the loan. A guarantor needs to be someone who knows you, but is not financially linked to you. If for any reason you do not repay the loan, it will then become the guarantor's responsibility.
Not in all instances. If a guarantor has a strong credit rating and credit score, they do not need to own property.
Interest rates for guarantor loans are higher than a standard bank loan due to the risk to the lender. Interest rates can be around 40% to 50% APR/Annual Percentage Rate. Rates for guarantor loans while higher than a standard bank loan, are much lower than the 1500% to 2000% or higher for a payday loan.
Guarantor loans can be for various amounts, £1000, up to £7,500 in some instances. Terms can be for as long as 60 months/five (5) years. This makes repayments more affordable.
Your loan is repaid each month via direct debit and your personalised loan contract will detail the amount of your monthly payments. You can obviously set a date each month for us to collect your payment which is convenient to you.
If your payment fails, for whatever reason, then we will get in touch to make suitable arrangements and will look to get your account up to date ASAP by taking a debit/credit card payment.
If you think you are starting to have any financial concerns, please call us ASAP and we will see what we are able to do to help you; our telephone number is 0161 850 4141!
If you need any further information about how you can manage any arrears you have then view some regulatory advice here
Whilst we can't offer you specific financial advice, we will try and help you maintain your Buddy Loans payments in an affordable fashion. In the event that you don't make your payment, then we will try our best to contact you but if we aren't able to then we will contact your Guarantor to discuss your account.
As Guarantor, you are really helping out your friend/family member/work colleague in getting the credit they need.
As with any commitments this also comes with some responsibilities to help ensure that they keep on top of their payments.
We will keep you informed at all times throughout the loan of anything you need to know about, but if there are any hiccups along the way then we may be in touch to discuss any missed payments.
Ultimately, if your borrower doesn't make their expected payments and/or doesn't make any agreement to catch it up then we will look to you to cover any missed amounts.
As you are acting as guarantor for the loan, then the only updates to our credit reference agency are regarding your borrower. However, if payments are missed for a period of time and, as Guarantor, you don't make sure that the loan is brought up to date, we will be required to report this through to our credit reference agency. This will have an impact on your credit score and is stored by them for up to 6 years! We will try our best to contact you and make suitable arrangements before this happens so would urge you to contact us if there are ever any problems.
Yes, guarantor loans are underwritten in the same process as other forms of loans, and affordability checks are in place. The nature of the loan is that the borrower may have poor or no credit, so a guarantor strengthens the loan.
Yes, many lenders do not have prepayment clauses and you can pay the loan off early, or pay more towards the loan each month.
Approvals vary from lender-to-lender, many will have the loan approved in 24 hours depending on what documentation is required and how quickly it is provided. Once the loan is approved, the money can be transferred to the borrower's account within hours.
If for any reason the borrower cannot repay the loan, the lender will contact the person who guaranteed the loan for payment, they will then be responsible to pay the loan.
We want to make sure that your loan works in the best possible way for you so have tried to make the application process as simple and straightforward as possible.
If you have any questions about your application at any stage, feel free to give us a call on 0161 850 4141!
Sounds simple eh? Well that's because we've tried our best to help you get your loan in the most simple and straightforward way.
Here at Buddy Loans we obviously think that our Guarantor loans are the best thing since sliced bread, but you might not have heard of such a thing before, so here's a few reasons why we think they are so good!
We do want to support you in the best way we can and equally need your guarantor to be credit worthy. We'll talk them through the process and ensure that they meet our requirements but please talk to your guarantor to ensure that they are comfortable standing as your guarantor. In short, your guarantor is not only there to support your application but also the ongoing repayment of your loan for the whole term. If for any reason you are aren't able to make your payment in a particular month, then we will contact your guarantor to ask for their help in arranging payment - this might mean they get a call from us if you miss your payment or if we can't get in touch then they might have to make the payment themselves. In the unfortunate event, if neither of you make the payments for the loan then ultimately we will pursue both you and your guarantor for any outstanding monies and it may result in your credit ratings being affected and potential action being taken. We would always urge you to stay in contact with us as we will help you wherever we can if you are experiencing any issues with your finances. Our interest rates are a little bit higher than mainstream bank and high street lenders; our annual interest rate is 41.16% which works out to 3.43% per month. We do work out our interest on a daily basis so if you ever want to pay off any higher amounts from your loan then it will cost you less in the long run. You can make a payment to us without charge or any extra cost to you!
A Guarantor is a good friend, a family member or a work colleague who knows you are a good person and knows you can repay the loan, your Buddy guarantees the loan for you.
An ideal Guarantor can be:
Minimum period for repayment: 12 months | Maximum period for repayment: 60 months | Minimum APR 49.8% | Maximum APR 49.9%
Representative example: Amount of credit £3,250 for 36 months. Interest (fixed at 41.16%): £2,464.57. Total amount payable of £5,714.67. Representative 49.9% APR (Variable). 36 repayments of: £158.57.