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FAQs - Borrowers & Guarantors

Frequently Asked Questions – For Borrowers

Hopefully here you’ll find your question with its partner answer. If you can’t find what you need then please use our contact form. We’ve also prepared a FAQ for guarantors.

Q

Can you accept applications from people with a bad credit history?

A

This type of loan is perfect for a borrower with a less-than-perfect credit history - so you can be accepted. Our lenders consider all applicants regardless of their credit history. If you've been refused by high street lenders then you should seriously consider a guarantor loan.

Q

Why is a guarantor required for the loan?

A

If you have a bad credit history, or very little credit history at all, you need a guarantor to assure a lender that they’ll get their money back – especially if you get into financial difficulty. If you keep up your repayments, your guarantor won’t need to do anything more than sign the agreement. A guarantor just gives the lender a guarantee over repayment.

Q

Will I be credit checked?

A

Both you and your guarantor are likely to be credit checked. This is done to ensure the lender has a clear picture on your current and previous borrowing history. A lender will need to check, for example, that you’re not bankrupt or in an IVA. A lender also needs to ensure you are who you say you are. This is done by looking at your credit file, which has the details on your borrowing history.

Q

How much can I borrow?

A

The largest loan is £15,000. The exact amount that will be offered to you will be decided on following receipt of your enquiry and will depend on the lenders' assessments of your situation. All our lenders operate responsible lending policies and will need to conduct affordability checks. Not all lenders will feel they can offer your desired amount.

Q

You have offered me less than I would like, can you help with a larger amount?

A

All applications are individually considered. The amount that can be offered will be the largest amount that it is felt can be lent to you at this time. However once you have successfully made repayments for a number of months your credit limit can be reconsidered and you may be offered a top-up loan. All lenders on our panel offer responsible lending policies.

Q

Can I make overpayments?

A

This varies a little by lender, but in general you have absolute freedom to make overpayments as you wish - to either reduce your payment period or skip payments in the future. The only thing is that you must make at least the normal monthly payment agreed to on your application form. By making overpayments you can reduce the total cost of your loan because less interest will be charged. You can even pay off the entirety of your loan early. Read your lender's small print for details.

Q

Can I settle my agreement early?

A

You should get in touch with your lender but in general you may settle the loan agreement at any time. In most cases there should be no penalties for doing, but do talk to your lender for details.

Q

Have you received my loan application, as I have not had confirmation of a decision yet?

A

When your credit agreement has been received by your chosen lender you will be assigned a dedicated case worker who will aim to process your agreement within 24 hours typically.

Q

What forms of identification do you accept?

A

The requirements depend on the lender and these will be explained in the information they send to you by email or otherwise. The majority of lenders have or will be moving to an "online only" model. This means that they rarely require any physical documentation from you to prove your identity or that of your guarantor.

Q

Why do I need a debit card?

A

Lenders currently use debit cards in some cases to collect repayments. This is the fastest and easiest way for them to collect money from customers and provides more security for you.

Q

I don't have a debit card, what can I do?

A

This may be a problem, but it depends on the lenders who are willing to lend to you (in principle). We suggest you make your enquiry and see which lenders want to lend before talking to them. You do need a bank account, so if you don't have a debit card you should also talk to your bank about obtaining one.

Q

I have been accepted and received my loan agreement form, what do I do next?

A

Nowadays you shouldn't receive any physical documents and neither should the guarantor. However, in some rare cases there could be documents to read and sign. If so, read them and if you and your guarantor are happy then sign and return them along with any other supporting documents the lender may have requested. You may also have the option of providing some of this information online.

Q

I have applied for a loan but want to change some of the details. How do I do this?

A

If you have received confirmation that your loan is with a caseworker please contact them on their direct number. They will then be able to make the changes you need.

Q

How long will it take to be paid out?

A

Our lenders aim to pay out on your guarantor loan within 24 hours of accepting your completed application.

Q

What happens if I am struggling with the repayments?

A

If you’re finding it very hard to keep up repayments on your guarantor loan, and have missed a payment, or think you’ll miss one, the most important thing is to talk to your lender. Don’t be afraid to talk to your guarantor lender and your guarantor if you’re having problems repaying. Your lender would need to talk through your situation and understand your circumstances. Once you’ve explained the situation, a plan could be set up with your lender and your guarantor, to help you keep up repayments and prevent the situation getting worse. If it gets serious, there are debt advice charities that can help. They can provide guidance, advice and set up a debt repayment plan, all for free. Some of these charities are StepChange Debt Charity, the Money Advice Trust and Christians Against Poverty.

Q

What happens if I have a problem or complaint against the lender?

A

Talk to your guarantor loan lender first and try to resolve the issue between you. If, after eight weeks, you don’t feel your complaint has been dealt with to your satisfaction, you can contact the Financial Ombudsman Service. The financial ombudsman is an independent adjudicator, unconnected with any financial firm, who tries to resolve the complaint based on all the evidence from both sides.

A father with his son and daughter

Frequently Asked Questions – For Guarantors

Hopefully here you’ll find your question with its partner answer. If you can’t find what you need then please use our contact form. There's also a page dedicated to explaining what it means to be a guarantor. We’ve also prepared a FAQ for borrowers.

Q

I have been asked by someone to stand as their Guarantor for a loan. What does that mean?

A

By acting as a Guarantor you are taking responsibility for the loan if the applicant fails to keep to the repayment terms. So long as the loan is repaid on time you will not have to do anything more than be part of the application process. However you should not agree to stand as Guarantor unless you are completely comfortable with the idea that you may have to make repayments if the applicant does not. Read more about being a guarantor.

Q

Do I meet the criteria to be a Guarantor?

A

These are the guarantor criteria for loans of £500 to £15,000.

Q

What is involved in the application process?

A

These days most lenders are able to process applications 100% online. Once the borrower has completed their part of the application the lender will contact you. If they cannot conduct the appropriate checks on line you may be required to send them some documents.

  • You will need to sign the agreement along with the applicant.
  • You may be required to provide a proof of identity (e.g. copy of passport) and copies of recent bank statements. However, our lenders are trying to simplify their processes and there is a growing likelihood that this will not be necessary.
  • Direct Debit may be used to collect money from you in the event that payments are missed by the applicant.

Q

Why do I need a debit card?

A

As a guarantor you are responsible for meeting repayments if the applicant falls into arrears on a loan. The lender may use the debit card details or a direct debit to collect the payment from you in the event that it is impossible for them to collect from the applicant. A credit card may be acceptable.

Q

Will you keep in touch with me to let me know how the loan is being handled?

A

Yes, lenders will keep you updated on the borrower’s situation. The exact process will depend on the chosen lender. Some may send you a monthly statement so that you know that the loan is being repaid correctly. But rest assured that any lender would contact you if there were issues with the borrower. They would contact you by your approved method of communication.

Q

Can I act as a Guarantor for more than one loan with you?

A

No, if you are already standing as guarantor for one loan you cannot stand as guarantor for another until the first has been paid off.

Q

Can I change my mind about being a Guarantor?

A

You can change your mind about being a guarantor at any time until the loan has been paid out. When the loan is paid out it will normally be paid out into your bank account. It is then your responsibility, as the guarantor, to pass the money on to the applicant. Once you have done this you cannot change your mind about being the guarantor. You will be liable for the repayments on the loan and any other charges until the loan has been paid off.

Q

Can the loan be paid off early?

A

Generally our lenders are flexible about this issue. The borrower can make overpayments and either reduce their payment period or skip payments in the future. The only thing they insist on is that the borrower make at least the normal monthly payment agreed to on their application form.

Q

How will you deal with the information that you hold about me?

A

We don’t require and we do not gather any data from the guarantor.

Your Credit Rating & Being a Guarantor

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