The UK is a place where taking a loan has become the most popular option for people who are experiencing financial difficulties. Many lending companies offer short term loans, quick loans, or cash loans. All these loan products have minimal qualification requirements with fast processing and release. However, the amount that one can borrow may be minimal. While they are easy to take and are useful for a small emergency, they might not be enough to meet a significant financial responsibility.
How can you borrow a significant amount if you have lousy credit and no property to use as collateral? Taking a guarantor loan is the answer. In a guarantor loan, you must find someone to guarantee your loan. You can ask your close friend or a close relative to act as guarantor. He would assure the lending company that if ever you cannot pay back your debt, he will take the responsibility of paying for it. Taking a guarantor loan also has its benefits as follows:
You Can Borrow Up to £10,000
When you take a quick loan, the amount that you can borrow will only be from £300 £1000. If you need more than £1000, you might have to apply to another lending company, or you might have to take another loan to have the amount of money that you need.
With a guarantor loan, you can borrow up to £10,000, which could easily cover for your emergency. Lenders feel confident that you can pay back your loan, and if you cannot, your guarantor will help. It is crucial to choose a guarantor with a good credit rating and with the financial capability to repay your debt if ever something happens to you. With the right guarantor, you can expect fast and easy processing and release of your loan.
Your Credit Score Is Not an Issue
Most lenders avoid giving loans to people with bad credit because they present a significant risk. Nevertheless, a guarantor loan has someone to pass on the debt in case the borrower cannot manage to repay his debt. Guarantors understand their responsibility, and they seldom would back up someone they do not know. When you have a guarantor, your credit history would not matter anymore when you borrow money.
Low- Interest Rate
Guarantor loans usually cost less than other types of quick loans. Because lenders have the assurance that the guarantor is there to cover for the debt, lending institutions charge an affordable interest rate.
Flexible Repayment Terms
Unlike other quick loans that are payable within three to six months, you can repay your guarantor loans within 60 months or five years from the day you took the loan. Spreading the overall debt over 60 months results in lower monthly amortisation. Since the interest rate is low, the total cost of the loan would still be lower. Nevertheless, if you want to stop worrying about your debt, you can pay it earlier than the agreed payment term.
Quick Transfer of Funds
Approval of a guarantor loan application may only take a few hours to one day. Applicants only need a few documents to submit, and the lenders may take a soft check on the applicant’s credit history. The lender would be looking for cases that show that the borrower can pay back the loan. Once this requirement is present, lenders would be ready to approve the loan.
Helps Build Credit
Once you have taken a guarantor loan, you can start building your credit by making prompt payments throughout the repayment period. You can indeed borrow money without a high credit score, but being able to apply for a loan that requires a credit score is something that will open a lot of doors for you.