What You Should Know About Guarantor Loans

21 Mar What You Should Know About Guarantor Loans

Are you facing a money issue and need quick cash? Even if you have bad credit and don’t think that it is possible for you to get approved for a loan, your chances may be improved by considering a guarantor loan. Everyone is considered for this type of loan even if you are over your head in debt. You can get an approval in as little as 24 hours and receive your cash just as quickly. You can even repay the money back early if your financial situation were to change. There are no setup fees involved in a guarantor loan and no additional costs to consider. Therefore, you have nothing to lose and your financial peace of mind to gain when you consider taking out a guarantor loan.

What Is a Guarantor Loan?

When you are considering loans with a guarantor, there are several things that you should now. A guarantor loan is a type of loan that is unsecured and requires a guarantor, or a co-signer, to sign the loan documents with you. The guarantor is the person who agrees to pay off the debt if the borrower is unable to do so.

In the UK, the minimum age to take out a guarantor loan is 18 and all applicants must either be employed full- or part-time and reside in the UK. The guarantor is usually expected to be at least 25 years old since he or she will be taking over the responsibility of the loan if the borrower fails to pay it back.

What Are Guarantor Loans Used for?

A guarantor loan can be used for many expenses but they are typically used for life-altering purchases such as a new car, a down payment on a home, wedding costs, or a new business loan. Typically, customers can borrow as much as £15,000 with this type of loan.

What Happens If I Can’t Pay Back My Loan?

It is a common belief that the first time the borrower misses his or her payment, the entire debt falls to the guarantor. But that is not the case. If the primary borrower misses a payment on his or her loan, the lender will usually attempt to contact him or her and figure out a way for him or her to make up the payment. If the borrower does not respond to any type of correspondence from the lender after several attempts or if he or she goes missing, the guarantor is then contacted to pay off the debt.

What If I Use a Guarantor Loan to Start up a New Business?

Having a long-term loan such as a guarantor loan that lasts for several years will usually give a business owner enough time to start up his or her business and put him or her in a good position financially so that he or she can pay off his or her loan early. The option to pay off the loan earlier than the term lasts can also help the borrower save on interest fees. This makes a guarantor loan a great choice for anyone who could use a business loan.

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