We often get asked:
Well, it’s “Yes” to both. These days whether you or your guarantor own your home or not is largely irrelevant. The market has matured and competition between lenders has increased. Now non homeowners and tenants are properly provided for. Credit doesn’t depend on property ownership. Applying is straightforward and you can get quotes now.
There are some differences between guarantor loans for non homeowners and property owners. But these differences are relatively small at the typical loan amount (£3000 to £4000) and loan term (36 months).
If you require £15,000 then we have lenders who will consider your application as seriously as if you owned your home. The only difference is that you may pay a higher interest rate. This would become clear when you make your application. You’ll need to make sure your loan is affordable and you can repay the due amount each month.
You’re probably looking for a guarantor loan because you have some kind of bad credit problem. Your bank or building society may only lend you money if it secured against an asset e.g. your home, a car or jewellery. But nobody wants to lose what they own so a guarantor loan could well be a better option:
If you want to know more about guarantor loans watch this short video:
Your credit score is your passport to future loans, mortgages, and other types of financial products, and how much you pay for them. Some lenders (but not guarantor lenders) will simply grade applicants based on their credit reference information, to make a lend/don’t lend decision. You may have been refused credit because of this process.
A guarantor loan is different. It’s not dependent on just your own credit reference information. Other factors, like your guarantor’s borrowing history, are also considered.
If you do have a poor credit score and get a guarantor loan, you can improve your credit score over time by making repayments in full and on time. A good credit rating will help you borrow more cheaply in future.
The process is the same regardless of whether you pay rent or have a mortgage:
Being able to offer credit to tenants is more important than ever because the UK property market is tougher now than it has probably ever been:
Written/Reviewed by: Marcel Le Gouais