Whether you need some emergency funding for car repairs, home improvements or to tide you over until the next payday, there are many financial options available. From secured loans ideal for homeowners looking to borrow large amounts to getting financial help from friends and family, the best method will depend on your circumstances.
Guarantor loans are one possibility and offer a range of advantages, especially for those who feel they have nowhere else to turn for financial help. Read on to learn more about the benefits of considering such an option.
Guarantor loans were designed for people struggling to borrow money from other sources due to having a poor credit score. As long as you can find someone over the age of 25 with a good credit rating to be your guarantor and you yourself are not bankrupt, in an IVA or debt management plan, then getting a guarantor loan is an option for anyone to consider. You do need to be able to afford repayments but the chances of being successful are much higher.
Borrow High Amounts
Due to having a guarantor who is used as a kind of safety net by the lender in case you cannot meet the repayments, these types of loan allow you to borrow large amounts. If your guarantor is a homeowner the amount able to borrow will be larger than if they are a tenant, making it a better choice if you need the money for expensive purchases.
The process of taking out a guarantor loan is relatively quick, with most processed and the amount deposited in accounts less than 24 hours after a successful application has been made. If you’ve sourced a guarantor and are in need of an unsecured loan, this offers a great solution.
The repayment terms will depend on how much you borrow and how much you can afford to repay over the coming months. They are usually very flexible, with some guarantor loans lasting up to seven years where required, as opposed to payday loans usual 30-day deadlines.
Low Default Rates
Compared with its main rival of payday loans, guarantor loans generate far fewer problems. According to Citizens Advice they received just over 500 problems with them from April 2012 to 2015, compared with 29,000 regarding payday loans during the same period. While it is a smaller market this still shows a significantly less problematic area for borrowing.