When applying for a loan with a poor credit score, you are often met with several rejections before you find a lender that will give you the money. However, with a guarantor loan, you can gain access to the funds you need with the added security of a guarantor loan. To help you on your way to applying for loans, we will be providing you with some insight into how you should begin applying for guarantor loans.
What Is a Guarantor?
A Guarantor is a loved one or a friend that signs alongside the borrower on a guarantor loan. When signing alongside the borrower, they are responsible for paying for the loan should the borrower miss a payment or be unable to meet any monthly repayments. This is a legal obligation that puts them as the sole payer should the borrower not have the funds to pay back the loan.
What Criteria Do They Need To Meet To Be A Guarantor?
Unlike that ofpayday loans online UK services, a guarantor loan requires your guarantor to be a certain age and follow a number of different criteria to qualify. To qualify for being someone’s guarantor, you need to fit into the following criteria at the time of filling I the application:
- They must be over 21 years old
- They must have a regular income
- They must have a good credit history
- They must have a good credit report
- They must have a separate bank account to the borrower
- They must be good with money.
What Is The Guarantor Responsible For?
A guarantor is responsible for making sure that the loan is paid off should the borrower not be able to meet the monthly repayments. Therefore, it is important to make sure that you are only applying to be a guarantor for someone that you know can afford for a loan. In addition, if you are struggling with your own finances, you should not be applying to be a guarantor for someone as this can put additional strain on your finances that can be an issue in the future when it comes to applying for loans so therefore should be avoided.
Why May You Use A Guarantor
You may use a guarantor for several different reasons when it comes to applying for a loan, the most common reason is of course not having a good enough credit score. A guarantor is an added layer of security for the lender and will in turn increase their chances of being accepted for this loan type. In addition to this, someone may use a guarantor when it comes to signing a lease on a home or an apartment as this can provide the landlord with the financial security that they need to make sure that the rent is paid every month.
With this in mind, there are several elements that you need to consider when it comes to applying for a loan such as this. Where will you be starting when applying for a guarantor loan?