So you’ve had credit problems and are frustrated with lenders who’ve refused to give you a loan. You don’t believe that the problems you’ve had in the past should have any bearing on the future. You’re right! They don’t have to.
A guarantor loan helps you access credit even if you’ve got a poor credit history.
It can give you access to money now, and as long you keep up repayments, it can help you borrow more cheaply in future as your credit score improves.
As this video explains in 60 seconds there are numerous financial options that may still be available to you even if your credit rating has taken a knock. A guarantor loan is one of these options.
There are many advantages of a guarantor loan over other loans for people with bad credit scores:
As a broker our loan comparison service is designed to quickly find the lenders who are willing to lend to you in principle - you’ll get the same deals as going direct but save lots of time searching. And we don’t charge fees! Simply compare offers before applying to your chosen lender.
We have a more detailed explanation about guarantor loans, but in simple terms you provide a guarantor who agrees to underwrite your loan. If you were to fail to make your repayments on time they are required to step in to pay those for you.
The whole loan pivots around the presence of the guarantor but if you stick to the payments schedule your lender will never need to get your guarantor involved - in these situations the loan behaves just like a normal personal loan. This short video is designed to explain more:
Making your repayments on time and ensuring any loan you’ve got is, eventually, fully paid off, is the best way to improve your credit score. Your credit score won’t improve overnight though. You need to keep making repayments on time every month and gradually, you should see it improve. A guarantor loan, with a record of regular repayments, can help you borrow at a lower APR in future.
Need more detail? Read our “Ultimate Guide to Improve Your Credit Rating & Maximise Your Loan Acceptance”
Written/Reviewed by: Marcel Le Gouais