Guarantor Loan

Top tips for applying for a Guarantor Loan

When your credit is terrible, and you have no way of fixing it right away, it may not be possible for you to get any type of loan or credit. The credit score that you have is representative of whether or not you are capable of paying your bills, and if it is low, they will assume that you are not worth the risk.

If you need the money now, you could go to a payday loans company, the business that is not concerned at all about whether you have good credit or not. However, if you would prefer working with a regular bank, or if you are trying to get a loan for your car, there are many advantages to getting a guarantor loan.

What Is A ‘Guaranteed Loan’?

This is a loan that is secured waste upon the fact that another person has decided to co-sign with you

on a loan that you would like to obtain. They will look at their credit, and approved the loan based upon their high credit score, as well as their income to debt ratio. This can be very beneficial for you in that you may be able to get more money based upon another person's credit, but you need to be careful when you do this. If you have a bad credit score because you don't make enough money to pay your bills, then getting a loan at this point in time is probably not the best idea.

Please Note – If you are looking to borrow money for the very first time, please check out the following article for some helpful advice - https://www.moneyadviceservice.org.uk/en/articles/getting-credit-for-the-first-time

Why This Can Be Bad For The Guarantor

This can be very bad for the person that co-signs if you decide not to pay your bills, specifically the monthly payment on this loan. This will adversely affect their credit at the same time, which is why very few people like to co-sign at all. However, if the person that you are co-signing for has a low credit score because they have not had time to build a credit because they are young, or the reason that their credit is low is because of being laid off just for a few months, then it is probably a good decision to make.

Concerned about how this may affect your credit score? Check out the following video to see how you can boost your credit score

Make The Right Choice

It's always nice to help people out, and one way that you can do this is by becoming a guarantor on a

loan for a friend. This can also be done from family members, or colleagues at work, but you need to be very selective with the people that you choose to help. Make sure that they are going to pay the payments on the loan, because if they do not, you will be responsible for them. It is a great way to help people that you love or care about, but it can also create a very difficult situation if they are not able to make their payments.

After you have decided to do this, make sure that you talk to the people that are issuing the loan about the interest rate that will be charged. It may be better to work with another company that is more reasonable, but whichever business you choose to work with, you are still signing up to be responsible for the loan that they are making possible. Just do what is right, based upon the facts, and being a guarantor may not be the worst decision that you ever make.