Co-signed loans have only lately started to become a popular offering by banks in the UK. The main reason behind the rise in popularity has been the growing difficulty tenants and non-homeowners are encountering getting approved for a loan at the moment due to the effects of the financial credit crunch as banks and loan companies tighten their lending criteria. The situation is magnified if there is a history of adverse.

What is A Guarantor Loan?

A guarantor loan is a form of unsecured loan where an agreement is made between a third party and the Lender that ensures that the loan will be repaid, should the borrower be unable to keep up with the repayments. This arrangement is a legally binding contract.

Who Are They Best Suited To?

Because the loan is not secured against your home or car or anything else, guarantor loans are particularly suited to anyone older than 18 years of age but particularly:-
Non-homeowners, whether private tenants or council
Students or people still with their parents or with relatives
Homeowners with little or no equity in their home
People with a poor credit record or have been refused loans previously

Will an Adverse Credit Profile Affect My Application?

Definately not. With a loan of this type, there is no credit search carried out on the applicant, but one is carried out on the guarantor, therefore the endorser needs to be a homeowner with a healthy credit record. So having a bad history will not prevent you from qualifying for a guarantor loan. However, if you are bankrupt or in a debt management or IVA plan, you will not be able to get a loan.
How Much Can You Borrow?
With co-signed loans you can take out up to £5,000 depending on personal circumstances, over a period of up to4 years.

Who Can Act as a Co-Signee?

Anyone can act as a co-signee, but they should be a homeowner and have a good credit history. They will also need to have an income of £800 per month or more from any source. If the applicant fails to make all payments on the loan the guarantor will be responsible for the repayments.

Taking advantage of a guarantor loan can help to enhance your credit record so long as you make regular repayments to it, which could help you prospects of arranging finance without the need for a guarantor in the future.

guaranteed unsecured loan