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  1. The Best Way to Ask Someone to Guarantor Your Loan

    23 Jul 2015
    guarantor my loan

    Looking for credit when your financial history is perhaps a little shaky can be a frustrating experience. Not only could you be turned down without consideration by banks and other high street lenders, but you could find your remaining choices are either very expensive when it comes to paying back, or that you can’t get the amount you want. This is where a guarantor loan could come in handy – guarantor loans are aimed at those who may have been turned down by their bank or other mainstream lender. With the addition of a guarantor (who agrees to pay any loan instalments which are not met by you) you could borrow up to £5,000 at much more reasonable rates than those offered by short-term, high interest loan lenders. Read on to discover more about the guarantor –including how to get one.

    Why does my loan need a guarantor?
    Guarantor lenders, like Guarantor My Loan, require a guarantor in order to lend more money atmore reasonable rates. The guarantor acts as a confidence boost and an extra layer of security forthe lender – not only will a guarantor vouch for the borrower; demonstrating their trustworthiness,but they also agree to pay any part of the loan which goes unpaid by the borrower. Thankfully,instances where this is required are not common due to the affordability checks performed by thelender, ensuring that they’re lending fairly and that the loan is affordable. By having the guarantorthere to guarantee payment, the lender is able to offer much lower rates and therefore cheaperborrowing overall compared to other bad credit borrowing options.
     
    Who should I ask?
    A guarantor can be anyone you know, as long as they own their own home, have a good credithistory and are not older than 72 years of age. This gives you a wide scope which could includefamily or friends, although the majority of borrowers tend to get one of their parents to act as aguarantor for their loan. No matter who you choose, whether it’s a colleague, a cousin or achildhood friend, they will need to agree to be your guarantor and speak to the lender before anycredit can be approved. They will need to sign a contract, and it’s important that they understandthe full terms of the loan, as they will be responsible for paying it in the unlikely event that you areunable to make payments.
     
    What do they need to do?
    A guarantor will have to fill in a short application form and speak to the lender and answer a fewquestions. They do not need to front any money and will not have to pay a penny if the loan ismanaged properly. Once the loan term is over and everything has been paid, they’ll be signed off asa guarantor. A guarantor loan will not affect their credit file unless they also fail to pay a loaninstalment when asked. Of course, this is rare and will not come out of the blue. Good guarantorlenders will try to reach an agreement with the borrower before asking the guarantor to make upthe difference, and they will keep the guarantor in the loop the whole time to avoid nasty surprises.
     
    When should I find a guarantor?
    It’s preferable to find a guarantor before you make your application, as this can save a lot of time – itmay even mean that you can have your loan paid to you within 24-48hours of your first contact withthe lender. This is ideal for those who are borrowing to pay for something important, like a car forinstance, where time could be of the essence. It’s not essential that you have a guarantor waiting onthe side-lines before you apply however – you’re more than welcome to begin an application andcomplete your side of things before introducing a guarantor into the mix. Even where you needcredit quickly, try to take your time and think carefully about who is best to ask.
     
    How should I approach them?
    Approaching a guarantor can be nerve-wracking, but you must remember that the worst they can dois to say no. Acting as a guarantor may not be everyone’s cup of tea, and indeed they may not fulfilthe criteria required by the lender, so try to have more than one person in mind just in case. If youcan, approach a guarantor face-to-face, and make sure you can reassure them of your ability to payback the loan. It may be useful to have a plan set down on paper to show them how you intend topay back the credit and what you will be using it for. If you can, show them the website of the lenderyou’d like to go with and encourage them to speak to someone if they have questions which cannotbe answered online. The more you know about how the loan works and the more prepared you are,the better your chances of them agreeing to help.
     
    What if they say no?
    If your preferred guarantor says no, then ask them if they wouldn’t mind disclosing why. If theirreasons are personal then it may not be a good idea to try and change their mind. If they are sayingno because they simply don’t understand how the loan works or if they have the wrong end of thestick about an aspect of the arrangement, a good lender will be happy to talk them through anyquestions. Always have one or two other people in mind just in case.
     
    What if they say yes?
    If your guarantor is happy to proceed, they’ll need to fill in their side of the application form. If youhave already begun your application you may have been given a link to this part for them to fill in. Ifyou are yet to begin the application process, it’s advisable to sit down with your guarantor to fill inthe required information together.