If you have been looking for a loan and stumbled across guarantor loans, it is very likely that you will think that all of your prayers have been answered. Guarantor loans are very attractive and provide a range of benefits for the applicant. However, you need to make sure that you are fully informed of what is on offer with a guarantor loan and that you can meet all of the requirements associated with the loan.
Just because a guarantor loan seems like an easier and more attractive option than the majority of loan options doesn’t mean that it is a care-free or relaxed option. You will need to ensure that you find the option that is most suitable for your needs and then take the time to go over the terms and conditions for this style of loan.
You need to find someone who will act as a guarantor
This may seem obvious but if you want to apply for a guarantor loan, you need to find someone who is willing to back the loan application you make. You will find that the most common guarantors are friends or family members. This is because acting as a guarantor is a very big responsibility and there is a need for the person to know you well.
No one should rush into acting as a guarantor without knowing the applicant very well or being willing to stand by them with respect to finances. This is why there is a need to find the right person for the role. There will also be certain criteria for the applicant to meet and this will depend on the individual lending company. While the vast majority of lending firms are run along similar lines, each guarantor company runs by their own rules and guidelines, so make sure that you know what the terms and conditions are for the company you are applying to.
Guarantor loans apply good APR rates but not the best for everyone
One of the things about a guarantor loan that makes it so appealing is the fact that you can achieve a rate of interest that is much more attractive than you would normally receive. This isn’t the case for everyone though and if you have a good credit score; it makes sense to look for a loan from a more traditional lender. This is because people with positive credit scores are rewarded for this rating, and you should find that a more attractive APR is available for your needs.
A good rate of interest from a guarantor loan company will come in at around 40-50% whereas a person with a strong credit rating will find that they can receive a loan at around 10% APR. This is why you should take the time to find out your credit score and then see what the best offer available to you is.
While people with good credit scores will likely find that the guarantor loan option isn’t the best option for their needs, there will be plenty of people who do find that this is the ideal option. After all, with some payday loan companies providing APRs of up to 4,000%, there is a great deal to be said for obtaining a respectable APR from a guarantor loan company.
You can borrow good sums of money
With a payday loan, you will be limited to a small amount of money and this will usually need to be paid back in a small period of time. This isn’t the case with a guarantor loan though and you should find that it is possible to obtain a more suitable loan by arranging a guarantor loan.
You will be able to find guarantor loans between £1,000 and £12,000 depending on which company you obtain your loan with. You will also find that you’ll be able to pay this loan back over a number of years. This should ensure that you can obtain a suitable loan and then pay it back at an affordable rate for all of your needs.
A guarantor loan is the ideal loan option for many people and you should find that there is no shortage of options when it comes to finding the loan that is perfect for your needs.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.