Guarantor Loans
If your credit history is poor or you simply don’t have much in the way of previous credit built up, getting a loan can be challenging. With this type of loan, people with a poor credit history can borrow money with the help of a guarantor.
This is usually a friend or family member who has good credit history themselves and is prepared to guarantee the repayments if the borrower defaults. As long as the borrower makes the repayments on time, the guarantor will not have to pay anything.
Is a guarantor loan a good fit for me?
In the event that you have a bad credit record or have been turned down by different banks, then guarantor loans could be an option worth consideration. A guarantor loan could let you borrow more money than you would usually be able to with many other poor credit loan types. Making repayments on your guarantor loan in a timely manner could also help to rebuild your credit rating by demonstrating that you are able to make repayments consistently.
Choosing a guarantor for your loan
Practically anybody can be your guarantor, provided that they are not fiscally connected to you (i.e. your husband or wife). A guarantor could be a relative, friend or even a professional acquaintance.
Your guarantor will typically need to be older than 21, have a good credit score, and own a UK property. Becoming a guarantor a major financial and legal undertaking so it makes sense for you both to seek professional advice before you commit to a guarantor loan.