The Complete Guide For Guarantor Loans – UK Direct Lenders
When you search for guarantor loans uk direct lenders on the internet, there can be a lot of confusion…
Guarantor loans may not be new, but their recent expansion is undeniable. It has given access to those who are having trouble getting credit.
They might not have accumulated enough credit history. They might have made some mistakes in the past that have contributed to a lower credit score.
Guarantor loans have lower annual percentage rates (APRs) since their repayment terms are longer than those of payday or instalment loans.
A guarantor is a party who guarantees repayment of the loan in the event that the borrower defaults on the terms of the loan. Lenders can avoid giving the borrower’s creditworthiness as much weight by having a third party guarantee the repayment plan. No assets are in danger because guarantor loans are unsecured.
Let us translate it for you. A guarantor guarantees that the guarantor loan will be paid. As simple as that.
How do guarantor loans actually work?
It is no secret that “ guarantor loans Uk direct lenders “ actually mean normal guarantor loans… But how do they work exactly?
There are 3 parties – The lender, the borrower and the guarantor. The guarantor pays the loan to the lender if the borrower cannot. It is that easy.
Guarantor loans are often offered for sums between £1,000 and over £10,000. Repayment terms can range from one year to more than five years in some situations. The fact that there are three parties to the agreement—the lender, the borrower, and the guarantor—distinguishes them from conventional unsecured loans. By agreeing to the credit agreement, the guarantor pledges to pay back the loan. Yes, they have to settle it if the borrower is unable to adhere to the repayment schedule.
There are also much smaller guarantor loans available, where a borrower can submit an application for anything between £50 and £750 over a brief period of time. These must be paid back in instalments, unlike payday loans. Daily interest is levied on this type of guarantor loan, therefore prompt repayment might reduce the cost of the loan.
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So should you take these infamous “ guarantor loans UK direct lenders “? This highly googled term can come back to bite you… So please read this before you continue.
It might be challenging to come up with the cash for bigger purchases like a new automobile if you’re new. Whether it is to the credit market, if you lack appropriate credit history, or have a credit rating… You might want to think about a guarantor loan if you find yourself in this situation. It might make it possible for borrowers with less favourable credit histories to obtain greater loans than they should. This is one of the biggest advantages when it comes to guarantor loans
Guarantor loans typically have lower interest rates than other unsecured loans. They are used if there is a concern about a borrower’s credit history. APRs range from 45% to 50% on average for loans. A guarantor loan could be a quick fix if you need money urgently… If you’ve had problems obtaining other forms of credit like credit cards or unsecured loans. Guarantor loans are often paid straight into a bank account within 24 hours of the application being submitted, provided you match the eligibility requirements.
Pros and cons of guarantor loans
Now that you understand guarantor loans, it’s time to give you some statistics. Did you know that “ guarantor loans uk direct lenders “ is a term over 1000 people search DAILY?
It is important not to take more loans than you can handle, so here are the pros and cons.
Pros of guarantor loans:
- Guarantor loans provide access to credit to those with below-par credit histories or low incomes.
- The availability of guarantor loans is becoming more widespread due to lenders who cater to personalised needs.
- In contrast to short-term loans and payday loans, guarantor loans have lower interest rates.
Cons of guarantor loans:
- The guarantor’s responsibility will be to repay the loan, in part or in full, if the borrower cannot, regardless of their financial situation.
- If the guarantor cannot repay after the borrower defaults, it may negatively impact their credit score.
- The borrower’s failure to pay could be mentally and financially stressful for the guarantor.
Congratulations. You now know the advantages and disadvantages of guarantor loans!
Who can be a guarantor?
Almost anyone can act as your guarantor. They can be a family member, a friend or a co-worker. They will have to be at least 21 years old and have a good credit history. A loan guarantor must have a stable source of income and if the borrower fails to repay, the guarantor has to take the lead. They need to repay the debt if the borrower fails to do so.
If you are considering asking someone to become a guarantor, or someone you trust has asked you to become their guarantor – think twice. Assess the financial situation and loan repayment affordability before you enter into any legality.
Who cannot be a guarantor?
Now that you already know who can be a guarantor, let us understand who “cannot” be a guarantor. There are a few things you have to consider while choosing a guarantor for your loan. Ensure that you do not choose a person who:
- Is your partner/wife/husband
- Shares a financial account with you
- Is over 75 years of age
- Not a resident of the UK
- Doesn’t have employment or source of income
- Have a poor credit history or no history at all
- Has received a CCJ or IVA in the last 6 years
Your spouse/partner is usually accepted as your guarantor, but there are times when some lenders do not accept them; Someone who is sharing any financial account with you is usually accepted as your guarantor, but there are times when some lenders do not accept them – when you apply for a guarantor loan, you will usually be informed who can be your guarantor.
Now you know almost everything about guarantor loans. Will the ones who searched for guarantor loans in the UK from direct lenders finally be satisfied? Not yet… One more thing.
Why compare guarantor loans with LoanTube?
Guarantor loans require a lot of thinking from your side. Heck, taking any type of loan requires you to do some good research and find the best possible loan for you…
That is why LoanTube is here, a loan comparison site that can help you make the best decision when it comes to choosing a loan amongst our partner lenders. It doesn’t matter if you’ve searched for guarantor loans in the UK with direct lenders or any other type of loan.
Comparing loans is often the smartest thing you can do.
How does it work?
With our state-of-the-art computer system, we can compare real-time offers from our lender partners.
This is all done in real time!
Once we’ve got all the quotes, we present all these offers with their terms and conditions to you. They will help you make an informed decision. And all of these at no extra cost.
Our proven state-of-the-art systems can help you get a loan in minutes, in 3 simple steps.
With us, the rate you see is the rate you get!
No fancy big numbers that will not only waste your time but make you hate lenders… We don’t want to waste your time or your resources.
On top of that our partners do soft credit checks so they DO NOT HARM your credit score!
Those are some of the benefits you get by getting a guarantor loan from LoanTube. Without further ado, you can get a guarantor loan and avoid making unnecessary mistakes. Just click here and you’ll be settled!
Remember that our service comes at no charge to you and that you don’t have to accept any of the quotes we provide you with if you don’t like them.