Guarantor loans allow you to borrow up to £15,000 using an extra person you know to act as your guarantor. This is typically a family member, spouse or friend and having another person added to your loan agreement gives the lender extra security and helps you get the finance you need.
Guarantor loans are commonly used for customers with bad credit who may have been turned down by mainstream lenders. However, if you can find a person to be a guarantor and if they are employed and have a good credit history, it will maximise your chances of approval.
Importantly, if you are unable to repay your loan, your guarantor will be contacted to step in and make the payment on your behalf. The guarantor will only be used as a last resort and the lender will always try work with you if you are struggling to keep up with payments.
allthelenders is one of the most established price comparison sites for short term lenders in the UK. We are proud to be working with over 10 guarantor lenders who are FCA authorised and able to help find the right loan for you. With different rates available for guarantor loans ranging from 39.9% to 59.9%, our price comparison calculator will help you filter down the results and provide a list of lenders who are best suited to your requirements.
How Much Can I Borrow with Guarantor Loans?
Customers can borrow between £500 to £15,000 with a guarantor loan in the UK. The amount you can borrow will depend on several factors including your monthly income and affordability. Your lender will assess how much you can afford each month to ensure that you do not fall into financial trouble.
The quality of your guarantor will also determine how much you can borrow, with guarantors that have the best credit histories, being a homeowner and in employment likely to maximise your borrowing facility.
Guarantor loans are repaid over 12 to 60 months in equal monthly instalments – with higher amounts typically reserved for those borrowing for longer time periods.
Tenant Guarantor Loans – What You Should Know
Most lenders prefer your guarantor to be a homeowner since having someone with a mortgage and their own property is likely to have demonstrated a good credit history in the past. In addition, they should be easier to contact if they have their own property and are less likely to move from their address under short notice.
However, the guarantor loans companies that we work with at allthelenders understand that not everyone can find a homeowner guarantor – and there is no reason that a tenant cannot be a suitable guarantor, with a good income and credit history. With this in mind, you will find that most of our lenders are willing to accept tenant guarantor loans, it just might mean that you are charged a slightly higher interest rate.
Who Can Be My Guarantor?
The ideal guarantor to have is someone who you know well and can speak openly to about your finances. This is why the most approved guarantors are parents and siblings. Some people will use close friends and relatives which is also a good option, others will use work colleagues, boyfriends and girlfriends.
It is noted that a guarantor loan can last up to 5 years and ideally you want to choose someone who you will still be in contact with – hence you might lose touch with some boyfriends or work colleagues.
Choosing a guarantor with a good credit history is essential, because you are able to leverage their good track record. The lender views this as ‘if someone with good credit trusts you, well we can too.’ You also want to ensure that the guarantor you choose has disposable income, because if they have to make a payment on your behalf, you do not want them to fall into money trouble too.
Apply with Guarantor Loans Direct Lenders
allthelenders is an independent price comparison site and we allow you to compare the rates of interest and loan amounts in a clear and simple way. When you have found the lender that is best suited for you, simply click on apply now and you will be taken to their website.
We only work with guarantor loans direct lenders meaning that you will be able to apply directly on their website with no hidden fees or other brokers involved.
A typical application takes around 5 minutes to be completed and you will be required to enter some basic details about your guarantor too, including their contact details. Both parties will be required to co-sign the loan agreement and further to a phone call and some credit and affordability checks, successful applicants can receive funds in 24 to 48 hours. To get started, simply click on ‘compare now’ below: