Can't get a loan?

If you’re looking for credit and you’ve been turned down by your bank, it’s likely you may have stumbled upon guarantor loans as a possible solution. Whether you know a lot about them or not, it’s important to understand exactly what each guarantor lender is offering and how it applies to your personal situation before applying for a loan. It may be that the first guarantor lender you come across is the right one for you, but as they all differ in various little ways, it’s essential that you rule out the ones which aren’t quite right. This time spent will benefit you in the long run and should ensure the loan process goes smoothly from beginning to end. Aside from finding the perfect guarantor, these are the steps you should take when deciding on the right lender for you:

First Steps: Guarantor Lender Credentials 

The first thing you’ll need to check when looking at the various guarantor lenders out there is that they have the right licences and legal permissions to be able to lend to you. Although it is not the sole responsibility of the customer to look for these credentials, you also can’t rely on others to weed out the illegal loan companies - just in case. Visit the lender’s website directly if you are hearing about them from a comparison site or through advertising and take a look around to get a feel for what they do. They should have a real contact address and telephone number (it may be worth ringing them to check this). They should also (and this is usually located at the bottom of the site) have a registered business number as well as an FCA (Financial Conduct Authority) interim licence number. 
If a guarantor lender does not have these credentials on display or if they don’t have valid contact details, then you may want to avoid applying with them, as you can’t be sure that they trading properly. It may also be worth checking for previous customer reviews too – more on this below. 

Second Steps: Repayment Amounts and Loan Cost 

Once you have found a guarantor lender with these correct permissions, you should then look at how much they lend and how much it will cost you to borrow from them. Many people will take any loan that they can when they need credit, but it can be worth your while to shop around a little to find a rate which saves you money over the longer term. This can make it easier to pay your loan back and will ensure you’re not paying more for credit than you need to. 
However, this involves more than just looking for the cheapest lender and going for it – as well as having reasonable rates, a lender may also have certain rewards and incentives which could sway your decision. For example, one of the leading guarantor lenders in the market, Guarantor My Loan, offer an exclusive cashback reward, which gives you one month’s worth of payments back once you have paid off the loan (as long as each payment was made in full and on time). This alone could bring the total cost of the loan down to a level where it beats what is offered by other companies.
When looking at the cost of the loan, you should concentrate on the APR. This stands for Annual Percentage Rate and is shown as the percentage of the loan amount that you’ll pay in costs and fees for a year. Working out how much you’ll pay overall can be a little confusing, so every lender is legally obligated to show you a full breakdown of what you’ll pay each month, what you’ll pay overall and what rate you’ll get throughout. Remember, if you opt for a shorter repayment term, you’ll pay more per month but less overall. If you choose a longer repayment term, your monthly payments will be smaller, but by the end of the loan term you’ll have paid more overall.  

Third Steps: Guarantor Loan Reviews and Reputation

Once you’re happy with what the loan will cost you each month and you accept what will be paid overall, you should take a look at customer reviews and the general reputation of the lender you’re interested in. It’s important to feel comfortable with the lender you’ll be dealing with; as it’s likely you’ll be tied to them for up to five years, depending on the loan term you choose. 
There are many different review sites out there where people can leave their opinions on a product or service. It’s worth looking at what previous customers have had to say about the lender you’re looking at applying with. Of course, it’s always worth taking the reviews with a small pinch of salt, but if there are generally more positive review than negative, you’re likely to be on the right track. When it comes to the negative reviews, check for clear patterns where issues seem to be noticed by more than one customer. You can then make up your own mind about whether you want to borrow from them. 

Lastly: Trust Your Instincts

Finally, it’s important that both you and your guarantor are happy with the lender and that it feels right. If you feel that they don’t talk to you nicely on the phone, or if you’re having trouble understanding exactly what is expected of you, then communication could prove to be difficult further on down the line. Borrowing money doesn’t just mean hitting the right criteria and filling in forms in order to get the money you need, it also means feeling happy with your reasons for borrowing, being comfortable with the lender and being fully able to pay the loan back in full and on time. The lender should go through an income and expenditure check with you over the phone to ensure you’re able to pay the loan back in your current financial situation, so as long as you’re happy and as long as they’re happy, all signs point to a successful and beneficial loan arrangement between you. 

REPRESENTATIVE APR 48.9% (FIXED)

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