If you’re looking to borrow around £1,000 - £5,000 with a manageable repayment schedule, perhaps for a new car, a holiday or to make improvements to your home/garden, it’s likely you’ll have come across Guarantor Loans. A relatively new way of borrowing, but one which is becoming more and more popular and well-known throughout the UK, a guarantor loan can be the ideal way to raise the cash you need quickly, even if you have been turned down by other lenders. You see, while you may think that being turned down for a loan will be the general consensus everywhere, a guarantor lender may well approve your application. Why? Read on to find out more…
Guarantor Loans UK regulation is very strong and all legitimate guarantor lenders will be working under the rules and guidelines of the Financial Conduct Authority (FCA), so you can rest assured that your loan application will not be approved if you can’t afford the repayments, or if you don’t legally qualify for credit. Being approved for credit by a guarantor lender after being turned down elsewhere does not mean that anything untoward is happening – it simply means that guarantor loans are subject to slightly different checks and requirements to other types of loan.
When applying for a guarantor loan, there’s one thing you’ll need which other lenders may not ask for, and that’s the guarantor. This is a person you know and trust, who has a more established and positive credit history than you, who will vouch for your application and agree to make any payments which are missed. Of course, it’s essential that you are able to handle the loan all by yourself, and it’s expected that you and you alone will make each monthly payment in full and on time. Your guarantor is there to lend an additional level of security for the lender and in return, you are likely to have access to more credit at a much more reasonable rate than you could successfully and legally get elsewhere.
Here, guarantor loans UK regulation to ensure that everyone involved – the lender, the borrower and the guarantor – are all treated fairly and that the loan has every chance possible of being successful and manageable for all concerned. This is why all decent guarantor lenders will, without fail, speak to the applicant and the guarantor as part of the process to ensure that:
Guarantor loans are primarily applied for online, via simple forms which can be completed in very little time. If possible, it’s a good idea to have a guarantor on board before you begin applying, but it’s not essential. Make sure you shop around to find the best deal for you, but remember that the cheapest rate doesn’t always mean the best service – being able to communicate easily with a polite and efficient account manager is always preferable.