Guarantor Loans - An Alternative To Bad Credit Loans?
Guarantor loans are a relatively new concept in finance which may let people with poor or no credit get finance
By Michael Strauss
Guarantor Loans - A Loan For Bad Credit?
If you've been trying to get a loan recently and you have a less than perfect credit rating, you'll probably have found it difficult to say the least. This is especially true if you don't own your home and so can't offer it up as security.
While there are still loan plans available for non-homeowners with poor or no credit history, these tend to rely on other factors being excellent, such as a high salary or something as simple as living in the 'right' postcode. For those who've exhausted all the bad credit loan providers, there may be a new solution: guarantor loans.
What Are Guarantor Loans?
Basically put, to get a guarantor loan you need to find someone who owns property and is willing to vouch for you, and guarantee that should you fail to keep up your repayments, they will take on the debt and continue with the payments.
This obviously means that your guarantor must trust you to service the loan, and for this reason the guarantor is usually a family member such as a parent, although in theory anyone can guarantee the loan.
What Are The Benefits Of These Loans?
The most basic benefit is that people who don't own their own property can get access to finance, effectively by using someone else's property as security. Even when someone with poor credit might be able to get a loan elsewhere, a guarantor loan might well turn out to be cheaper.
And The Disadvantages?
If you can't find anyone willing or able to guarantee your loan, then this option is not open to you. Also, many people might not feel entirely happy with the responsibility of having someone effectively mortgage their property for your own benefit.
How Can I Get A Guarantor Loan?
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