Let your friends and family share your financial burden.
Explore affordable guarantor loans with LoanTube.
Minor financial inconveniences are common, but they shouldn’t have to be overwhelming.
With LoanTube, you can get the right loan, at the right rate, on the right terms for all your financial needs!
Let us do the number crunching while you choose a suitable term. Our Guarantor Loan calculator allows you
to estimate your affordability and make an informed decision.
Affordable loans for both tenants and homeowners looking for convenient financial aid:
Essentially, a guarantor loan is a personal loan in which your guarantor agrees to pay your debt if you cannot pay it back.
By signing a guarantor agreement, a family member or close friend agrees to assume some of the loan’s obligations along with you.
Personal loan lenders may ask for a guarantor if you apply for a loan with a low credit rating.
Usually, financial advisors inform the guarantors of the potential risks of the agreement.
Once a guarantor signs the contract, the lender can hold them liable for repayments if the borrower fails to keep up.
Since a lending decision depends significantly on the applicant’s credit score, lenders normally seek a guarantee from applicants with a low credit score.
Thus, the guarantor partaking in the loan should have a decent credit history.
Here are some additional prerequisites that a guarantor should fulfil:
Whether you’re becoming a guarantor or involving a friend to guarantee your loan, you need to understand the gravity of the loan’s terms.
Suppose the primary borrower defaults, the debt transfers to you.
Defaulting on the debt can negatively impact your credit score, making it more difficult for you to obtain credit in the future.
Consequently, both guarantors and borrowers need to understand how guarantor loans work.
Having established who can be a guarantor, let us identify those who “cannot” be guarantors.
When choosing a guarantor for your loan, you need to consider a few things. Avoid choosing someone who:
When you or the guarantor do not settle the debt, there may not be a way out of the guarantor agreement.
Ending a guarantor agreement is possible only when:
A simple solution to getting out of the guarantor agreement would be to have the borrower pay their dues.
Therefore, the loan agreement will terminate in this way since both parties have fulfilled their obligations.
Even if the loan is long-term, lenders usually allow early repayment of guarantor loans.
You may, however, be charged a fee for early refund.
The borrower and the guarantor must share a close relationship and fully comprehend their agreement’s implications.
If you choose to be a guarantor, you can do so as often as you want.
Before guaranteeing multiple loans, you should consider some things.
In the case of a guarantor loan, the burden of repayment falls to the guarantor if the primary borrower fails to repay.
Your lender now has the right to issue you a CCJ if you, as a guarantor, cannot repay the loan.
Not only will this impact your credit score, but it will also impair your ability to get a loan in the future.
You should check the affordability of a loan before co-signing.
In addition, you may want to keep a copy of the loan agreement on hand so that you are aware of the borrower’s repayment schedule.
To ensure they don’t miss the repayment date, you can remind them right before it’s due.
Make sure you carefully read through the agreement.
Warning: Late repayment can cause you serious money problems. For more information, go to MONEYADVICESERVICE.ORG.UK
Credit subject to status & affordability assessment by Lenders.
LoanTube is a credit broker and not a lender.
Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on any debt secured against it.