Getting a loan can become challenging if you have low deposit or bad credit score. This is where guarantor loan can help you with your financial emergency. A guarantor loan is an unsecured loan that can be obtained with the help of a guarantor—a person who becomes the security against the amount of money borrowed. The guarantor is willing to take responsibility of the repayments in case the original borrower is not able to pay on time.
How to Apply — Eligibility Criteria
The application for guarantor loan may vary from lender to lender. The procedure is simple and you must follow the eligibility criteria thoroughly to get the loan successfully. Depending on which lender you are dealing with, check out their website for the criteria to apply for a guarantor loan without hassle.
The following are some of the most common factors all lenders consider before making their decision of granting you the loan. When applying, make sure you follow this criteria:
- Choose a guarantor who is willing to offer his/her security against the amount paid. He or she must also be a homeowner.
- The guarantor should be able to repay the loan in case you cannot. Most lenders also perform credit check against the guarantor.
- The ages of both the borrower and the guarantor should be above 18 years.
- In order to acquire a guarantor loan, both borrower and guarantor should be employed – in a part-time or full-time –jobs. Both of the parties should be able to provide income evidence or payslips.
- Bank statements and utility bills copies should also be provided by both borrower and guarantor.
- Most lenders require the guarantor to be homeowners. However, some lenders could make exceptions.
- Both the borrower and guarantor should be UK residents.
What Else Do You Need to Know
In addition to the factors mentioned above, it is important that you learn about the specific criteria of different lenders for a smooth dealing. If you meet all the criteria set by the lender, you can successfully apply for a guarantor loan.
Don’t forget to compare different lenders for loan guarantors to compare the rates and opt for the most feasible option available. Once you have selected the most suitable lender, you are required to enter your details along with the amount of loan you wish to borrow over the period of time. This allows the lender to calculate your monthly payments, interest rates, and other relevant data.
You can negotiate with your lender to make the loan terms more suitable for you. Once you are satisfied, you are required to enter the details of your guarantor. Since this requires the guarantors personal and financial details, it is important that you seek permission first. Only when you meet all criteria you will be considered eligible for a guarantor loan.
The process is pretty straight-forward, especially if you go through the terms and conditions beforehand to avoid last minute problems.
Don’t hesitate in seeking assistance from professionals who will guide you through the process and help you get your guarantor loan successfully.