We use Experian for all of our guarantor loan applications although we do have a facility with Equifax as well, however we like the credit score and credit search information provided by Experian because we feel it gives a fair reflection of an applicant and guarantor’s ability to repay the loan. It is worth pointing out that when we do a credit score on an individual, we only use this as a guide on which to base our lending decision. There are so many other factors involved with granting a loan such as the applicants disposable income, state of their existing credit (do they have too much credit already?) to name just a few.

If you apply for a loan with us and you want details of the information we hold on you, feel free to call us on 0151 343 3791 and we would be delighted to help.

The reason this is such a commonly asked question is because there are associated costs with renting a property and whilst they are not as onerous as the costs you would incur with a mortgage, they can still be pretty expensive to fund if you are young and just starting out on the property ladder, be that rented or mortgaged.

To give you an idea, according to this article on average rent costs in the Guardian, the average house rent now stands at £713 a month. So if we take that figure of £713 as the figure that a person will have to pay upfront to rent their home (you always pay your first months rent upfront) and you add on the security deposit of 1 and a half months rent (which is £1069) that gives you a total figure to pay upfront of £1782 which is a not inconsiderable amount of money.

That is why a guarantor loan can be a useful and necessary tool for an individual to pay their upfront rental costs and of course, any other associated costs with moving into a new home. A guarantor loan won’t suit everyone but they are a fantastic way to get a loan if you have a poor credit history or maybe haven’t been in work for very long.

To find out more, just apply online or call us on 0151 343 3791.

Apparently, complaints to OFT-managed advice service Consumer Direct increased from 2,059 between 1 July 2009 and 30 June 2010 to 3,167 during the same period in 2010-11. This marked increase is a result of the increasing desperation that a borrower feels when searching for a loan and often they will resort to desperate measures to try and do anything to secure their finance. We have also seen a number of enquiries to our website where potential borrowers have been told that we have accepted them for a guarantor loan and when we speak to them, we find that they have been charged an upfront fee and been told that we have accepted and approved them!

Quite often, the individual will not be able to get back in touch with the company who charged them and if they do, then the loan company makes it very, very difficult for the individual to get their money back as they stall them with requests for ID, requests in writing, etc. It’s not a new tactic but as the OFT says, it’s happening more and more and unfortunately guarantor loan lenders and brokers are being tarred with the same brush.

Full OFT report and article here

Lenders don’t or can’t lend. Borrowers who would have been accepted for a loan just a few years ago are now being declined. People who think they have a great credit history are now finding that because the banks have changed their lending criteria, their credit history is not all that great anymore. House prices are stagnating or in some cases, still falling, meaning that people have less equity in their property which in turn means that they will not be able to re-mortgage or arrange a secured loan against their home. Credit card providers are withdrawing credit at the drop of a hat meaning that those people who were using their card to buy the basics such as food, petrol and in some cases, pay the rent or mortgage, are also in a fix.

In a nutshell, trying to obtain credit or finance in the UK in 2011 is becoming almost impossible and frankly, the financial services sector is in a mess.

To try and make sense of it all, we asked Ian Ferguson of Money Search UK to give us his view of the market and to also explain the various loan products available out there today.

Unsecured loans V Secured loans

It’s probably best that I start out with a few simple explanations of what the various loan products out there actually do. How do they work? Who are they suitable for?

An unsecured loan is a loan that is given to an individual who has nothing to offer in return apart from a ‘promise’ that they will pay the loan back to the lender. This means there is no asset involved…No car or house to offer to the lender meaning that if the borrower doesn’t pay the loan for any reason then the lender has no option but to beg you to pay the money back and if that fails (and it usually does) then the lender will have to resort to threatening (but legal) letters to scare you into repaying the loan. If this scary tactic doesn’t work then the lender will have to resort to their final gambit; smack you up with a default and if that doesn’t work, a County Court Judgment (CCJ). A CCJ still doesn’t ensure the borrower repays the loan because a lot of applicants won’t care if this gives them a bad credit profile because frankly, most borrowers who get to this stage will have a history of unpaid credit (no matter how small) and one more CCJ isn’t going to make them rush to pay their debts.

Of course I am being slightly unfair to those individuals who cannot repay their loan for whatever reason and it’s worth me mentioning the differences between non payers.

Cannot repay their loan

These are the unfortunate souls who have taken out credit or finance and really want to make their contractual monthly payment but they cannot for some reason. It may be that they have lost their job, had their hours reduced in work, divorced or separated from their partner, etc. These people are genuinely in need of our sympathy because they really do want to pay their way but circumstances have got the better of them and they find themselves in the terrible position of not being able to keep up with their repayments. It is situations like these where lenders absolutely will be more sympathetic and they will often try and come up with a repayment plan that suits the borrower and their new financial state of affairs. Now on to the other scenario…

Will not repay their loan

These are the people that we shouldn’t feel pity for because they make life (and obtaining credit) much more difficult for everyone else. They will often take out a loan and no sooner has the money hit their account than they decide they are not going to pay it back. Of course, the chances of someone doing this in 2011 are extremely remote because of the way lenders across the UK have tightened their criteria and thus made it almost impossible for anyone with a bad credit history to obtain a loan. However, it still happens and someone could take out a guarantor loan and do exactly this. (more on guarantor loans later)

As stated earlier, their credit history may be so poor that one more default or CCJ will make no difference to them repaying the loan. Let’s face it, if you have a couple of CCJs already then one more isn’t going to make any difference.

Now the reason I have mentioned the differences between non payers in this section where we are discussing unsecured loans is because these scenarios tend to happen more when no asset is involved. In other words, if the borrower doesn’t repay the loan, then the lender cannot take something off the borrower in lieu of payment such as a house or car, hence the reason these loans are known as unsecured loans because there is no asset secured against the borrowing. If this was a secured loan, then the lender would look to repossess the house, sell it and use the proceeds of the sale to have their loan repaid; you can’t do that with an unsecured personal loan.

Types of unsecured loans

Now this is where it gets to be a little bit of a minefield because in reality, the only type of unsecured loan you can get is a loan that is…unsecured! However, just like any other business sector, marketers have come up with new and novel ways to describe various loan products such as:

• Bad credit loans
• Poor credit loans
• No credit check loans
• Tenant loans
• Car loans
• Debt consolidation loans

Yet regardless of how different they all appear to be, they are all relatively the same and just to confuse you even more, all of the above (except tenant loans)can also be obtained by way of a secured loan (or second charge). However for the purposes of this article, we are going to focus this aspect on unsecured loans only.  The reason that companies do this is to ‘sex up’ the products because let’s face it, there is nothing remotely exciting, interesting or novel about any loan or finance product so marketers have to try and make each product sound vibrant and exciting. The other thing that you have probably noticed about these types of loans is that they all seem to major on the fact that people have bad credit, unmanageable debts or believe they will be turned down for credit if they approached one of the high street banks and there is a good reason for this.

If an individual had a good credit history then they would just approach their local building society or bank to obtain a loan. The bank pays the money out and everyone goes home happy. Now if an individual is declined by the same bank or building society because of previous or historic credit issues then the potential borrower will have to look elsewhere for a loan because these types of lending institutions do not cater for people with a less than brilliant credit history. So…The borrower goes home, jumps on the internet and voila! There is a whole array of people and companies on the internet offering loans even if YOU HAVE BAD CREDIT! Brilliant.

Although it really isn’t so brilliant after all because there are literally thousands of companies all offering loans…tenant loans, guarantor loans, secured loans, etc and you have no way of knowing of who is good, bad or indifferent and we really haven’t got the time to discuss this in much detail because it really is a subject that needs a whole website dedicating to it. However, if you follow a couple of golden rules you should be ok and they are:

1. Don’t deal with any website that doesn’t give you their full address and landline telephone number.
2. Don’t deal with any broker that asks you for your bank details BEFORE you receive an official offer from a lender.
3. Don’t deal with any broker that asks you to pay a ‘small upfront fee for arranging your loan’, which of course is now guaranteed…!

As long as you follow those rules then you should be ok and remember, there are lots of scam brokers out there but there are also some excellent brokers who will find the right loan deal for you based on your particular circumstances.

Guarantor loans

These loans are still ‘unsecured’ but they come with an added level of security for the lender. They work like this; a borrower applies for a loan with someone else as backup (the guarantor). The borrower does not get credit scored, only the guarantor, so it doesn’t really matter what the borrower’s credit history is like because the lending is assessed against the guarantor, not the borrower. The borrower will receive the loan and make all of the monthly repayments on the loan and the only time that the guarantor is called into action is if the borrower doesn’t repay the loan for some reason. In effect, the guarantor is ‘guaranteeing’ that the loan will be repaid in any eventuality.

Now the beauty of this type of loan is that the lender is effectively lending to someone with a great credit history (the guarantor) whilst the borrower is getting a loan that they normally would not have a chance of ever getting accepted for so for the lender and the borrower, it really is a win-win scenario. The meltdown in the financial markets has meant that whilst most loan products have been removed or their lending criteria tightened so that it is much harder to get accepted for a loan, guarantor loans have grown in popularity simply because they are flexible, easy to obtain and fairly quick to process (unlike a secured loan)

Now whilst I could go on and on about the merits of a guarantor loan, I also feel that we should take a look at the much maligned secured loan or second charge as it is sometimes known. Again, because of the complexity of this type of lending, we may discuss this in greater detail on another occasion but in a nutshell:

Secured loans are available (usually) from 10k to 100k with most lenders capping their loans at 75k. The loan is secured (remember the difference between secured and unsecured?) against the property that the homeowner owns or has a mortgage on. Now if the mortgage is far less than the property is worth then you are in business. As an example, the house is worth 200k but the mortgage is only for 100k meaning that the homeowners have 100k in equity in their property and/or a 50% loan to the value of the property. This means that most second charge lenders will take a look at this deal because they can usually provide a loan of up to 80% of the property value. So, you take away the existing mortgage loan to value percentage of 50% leaving 30% of the property’s value as a potential second charge loan. 30% of the property value equates to a loan of 60k and means that the total loans to the value of the property now total 80% (50% + 30% = 80%). Phew! I hope you are still with me.

We will go into more detail next time but suffice to say that that second charge lending can be a great way to raise more than the usual 5k loan that you are capped at with an unsecured loan and even better, the repayments on a second charge can be spread over the term of a mortgage which can be as much as 25 years meaning that the loan is also affordable and within reach.

Next time I will discuss secured loans in much more depth.

We are due to unveil a brand new lender meaning that we will have so many more options to offer our clients. This new lender is just going through testing with ourselves but we should be ready to roll by the 1st August 2011 and it means that we really will have an option to suite every type of borrower, from those with a guarantor to those without, from £100 to £5,000 and for people with a poor credit history to those with a really poor credit history.

As always, as soon as we launch on the 1st August we will provide full details here.

Please have your unique reference to hand when calling and please tell the loan adviser what type of loan you are applying for such as unsecured loan, guarantor loan, etc and how much you are looking to borrow.

Both Natasha and Chris will be responsible for the operational side of the business and will process both consumer and introducer applications and will allow us to develop other loan sectors such as secured loans, payday loans and asset based loans. Our focus will still remain on guarantor loans because that is what we know best but these staff additions will allow us to expand at a much quicker rate and develop an equally strong proposition in other loan areas.

We are still looking for more staff,both on the sales and operations side so if you are interested in applying for a loan position, please send us an email (with Vacancy in the subject line) and brief overview of your career to date and we will get back to you in due course. Please apply at enquiry [ AT] anytypeofloan.co.uk.

Here you will find details of typical loan repayments for a guarantor loan. We have published the most popular loan amounts that we receive applications for.

These figures are indicative and do not constitute an offer of a loan or finance. For full details and our terms and conditions, we will need to produce for you a Consumer Credit Act compliant quotation. Full details are available on request.

You should always make sure that you can afford the repayments before applying for any loan, regardless of whether you have a guarantor supporting or endorsing your application. If you or your guarantor have a question or need clarification of a guarantor loan related issue, please get in touch with us today. Full details are on our contact page.

And here is the legal bit – all loans are subject to status, full terms and conditions apply.

This company are very well known, are based south of Birmingham and do huge amounts of loan business (mostly secured loans but they do a small amount of unsecured loans) but this is a bit naughty. Now let us state here and now that we have no issues with any broker or lender that charges a fee, that is up to them and it can be argued that a fair amount of work goes into a loan application regardless of whether the loan actually completes or not so a fee for the time, effort, telephone calls, postage and credit searches is not unreasonable.

It just so happens that here at anytypeofloan.co.uk, we do not charge our clients any fees at all for placing their guarantor loans.

Anyway, back to the story. This lady spoke to the loan company who informed that she had indeed been passed for a loan and that she was guaranteed to get her loan so all she had to do was pay this company a fee because they had done their job and ‘found’ her a loan. The lady was naturally delighted and called us to inform us that she has been told that she has been ‘passed’ for a loan with ourselves. When we expressed the fact that we had no knowledge of what she was talking about, the penny started to drop slowly. She checked her bank account and found that her account had been debited to the tune of £109. Not only that but this amount had been taken twice!

Now if all that isn’t bad enough, this lady told us that she doesn’t work and hasn’t done for over 3 years. The only money she receives is from the state and this money in her bank was from hers and her mother’s wedding rings which she pawned 2 days earlier.

This lady is in a mess, not only financially but also emotionally and the worse thing about all of this is that we cannot doa thing to help her because to qualify for a guarantor loan you must be working.

A salutory tale indeed…

Secured loans have had a pretty bad press in recent times and yet they can be a fantastic and cost efficient (yes, I did say cost efficient) way of borrowing money, no matter what a few online forums may tell you and I will explain why they can be good value a bit later on.

A secured loan is a loan that is secured against an asset such as a house or a car and if you remember from our first article, this is the exact opposite of an unsecured loan which is not secured against any asset whatsoever. This is why a secured loan is usually only available to a homeowner (obviously if you own a car outright but live in rented accomodation then technically speaking you can get a loan secured against your car)

For the purposes of this article, we are only looking at traditional secured loans that are secured against property. Most lenders only allow borrowers to borrow up to 75% of their property value so as an example, if your home is worth £100,000 then you could in theory borrow £75,000 of your property value in a secured loan. However, you then need to take off what you owe your mortgage lender, bank or building society. So if you had a mortgage of £60,000 you could borrow £15,000 on a secured loan based on the example above; £75,000 (that’s the 75% max that the secured loan company will allow you to borrow) less £60,000 (your mortgage) will leave you with a loan of £15,000.

Obviously, borrowing money via a secured loan (sometimes known as a “second charge” because the mortgage is the “first charge”) is dependent on a number of factors and they are:

• How much is your property worth?
• What is your mortgage balance?
• Your credit history
• Your income and expenditure

Now that may seem like a lot but when you consider that you can borrow up to £75,000 with a secured loan then you can see why there are a few more checks that need to be made. Next time we will look at the mechanics of this type of loan and exactly how they work in principle.