An ideal loan for anyone with bad credit is known as a guarantor loan. It can be more convenient and easy to obtain as compared to a normal bank loan.
You need a co-signer to make sure that if you fail to make repayments due to any reason, your guarantor will be able to make the repayments for you instead, you will need a guarantor (second person) for guarantor loan. Even if you have bad credit a guarantor loan would be an easy way of finance to undertake any new venture you want.
Who should be my guarantor?
Anyone that you know can be your guarantor. People ask their landlords, colleagues and employers but most of the people ask family members or friends to be a guarantor. They will need to age between 18 and 70 to be a guarantor during the time you take out the loan and when the loan completes.
They will need to own a home in the UK and must be based in the UK with a good credit score. Also, they must understand the obligation of being able to make the loan repayments if you cannot due to any reason.
What should be the age of the borrower and guarantor?
When you apply for a guarantor loan you must be at least 18 years old. When the loan completes you cannot be older than 70 years old hence there is an age limit.
The maximum age you can be while applying is 65 years old in case you are applying for five years loan and the maximum age you can be is 68 years old if you were to apply for a 2 years loan. The same rule applies to both parties that mean guarantor cannot be older than 70 years old when your loan completes but he must be at least 18 years of age.
Should my guarantor need to be a homeowner?
The answer is yes; your guarantor should own the home in the UK and must be a homeowner of it. At the time that you take out and complete your guarantor loan, it is necessary that your guarantor must be of age between 18 and 70 based in the UK with a home of their own.
Due to some reasons if you are not able to make the monthly repayments on your loan, then your guarantor should have a good credit score and must be in a position where they will be able to afford monthly repayments on your loan.
How to get a guarantor loan as quickly as possible?
Within 24 hours of applying, you could receive a payout after you have completed the application for your guarantor loan. You could receive your loan the same day as well which depends upon how long you take to provide your and the guarantor’s details on the application to the lenders.
The average turnaround time from application to payout is around two to four days, while some lenders pay out this quickly. This happens because the lenders need to contact the guarantor so that both parties must understand, read, sign and then return the documents for a loan. Another type of paperwork is also required in such a case.
The loan can be used for almost anything because many people use their loan for debt consolidation, wedding purpose and for car finance. Hence there is no limit but a law for what purpose you can use your loan for.
How much can we borrow with a guarantor loan?
There are most of the lenders who provide a loan between £1,000 and £25,000. The interest rate will differ on the amount which you borrow.
In some cases, the borrower doesn’t need to prove any income at all because having a mortgage with guarantor is a major profit which will help unemployed, university students and newly self-employed to get on the property ladder.
Lenders look at both the income and outgoings of the guarantor in order to work out on how much the guarantor can afford.