This 60 second video explains how guarantor loans work, why they’re helpful and how to get one through Solution Loans:
A guarantor loan is a type of personal loan. It is an unsecured loan, meaning you don’t have to provide an asset like your home, car, or jewellery as security against it.
The interest rate you pay for a personal loan is determined largely by your credit rating and your personal circumstances. But the rate for a guarantor loan is much less dependent on these things because you provide a guarantor.
A poor credit score is likely to make it much harder to get a personal loan from a high street lender. To avoid this problem a guarantor loan could be your answer. It can help you borrow even if you have got a bad credit history.
With a guarantor, you should be able to get an unsecured loan with a much more affordable interest rate.
A guarantor loan breaks the link between your bad credit history and your good credit future. In exchange for providing a guarantor, which reduces the lender’s risk, you should be able to get unsecured credit at a lower interest rate.
Once you have your loan it can help you to rebuild your credit rating – just make sure you make your monthly repayments on time and in full.
Follow these steps to get your guarantor loan:
Obviously finding a guarantor is the key to unlocking this loan opportunity. If you don’t think you can find a guarantor you may be surprised to hear that over 500,000 have or have had a guarantor loan. If they can find guarantors then so can you.
So, who is the perfect guarantor?
We’d recommend that you start with a broad list of names and then narrow it down to a short list. Have one or two reserves in case your first choice is not accepted by your lender. Lenders are likely to have different criteria. Also make sure that your guarantor is fully aware of their responsibility and that they really are happy to do it.
Written/Reviewed by: Marcel Le Gouais