Credit is hard to come by – Guarantor loans aren’t.
Why? Simple really. A guarantor loan is a loan taken out by an individual that has someone else backing them up behind the scenes. It’s quick, simple and means that even if the applicant has a very bad credit history or is not currently working, they can still get a loan by making use of the guarantor loan facility.
The applicant can have any or some of the following issues:
Poor credit history
Missed payments on credit cards
Mortgage or rent arrears
Bankruptcy
IVA
Student with lots of student debt and no full time income
Tenant with no property to use as security for the guarantor loan
Unemployed and only receiving benefits
The reason these people can be accepted for a guarantor loan is simple. Because they will be the applicant in name only, no credit searches will be done on these individuals. Any subsequent credit checkes will be on the guarantor – the person “sitting” behind the applicant with the good credit history and regular income.
Effectively, the applicant applies for a guarantor loan via our online application form. You then nominate someone to become your guarantor and the only stipiulation for this person is that they have a decent credit history and are in regular full time employment.
In terms of who can become your guarantor, it can be almost anyone: partner, brother,cousin,next door neighbour,your boss, work colleague, it doesn’t really matter as long as they can ‘vouch’ for you. The application can then process in the applicants name and all monthly loan repayments are in the applicants name and are made by the applicant. The only time the guarantor comes into effect is when the applicant is unable to make their loan repayments for whatever reason. Then, the loan company will go to the guarantor for repayment of the loan and it is because of this that the applicant should have a good relationship with the guarantor in case things go awry.
It is also worth noting that if the applicant decides not to pay, rather than not being able to pay, then this also falls on to the shoulders of the guarantor to repay the loan and there will be absolutely nothing they can do about this as they are responsible, ultimately, for the loan being repaid.
