Don’t get ripped off by loan guarantor companies


There are lots of companies that prey on people shopping online and unfortunately, loan guarantor companies fall into that category. Trying to obtain finance is difficult enough without certain firms trying to rip you off with extortianate upfront fees and bogus claims that they will never be able to substantiate.

The fact that most people who apply for a guarantor loan in the UK have some sort of financial problem or element of bad credit only makes things worse, because these are the most vulnerable members of our society. Let’s face it, a guarantor loan is for people who have explored every other possibility of getting a personal loan and this is almost their last chance of getting a loan.

Some guarantor loan companies in the UK are charging upfront fees of £90! and there is no guarantee that they will be able to find a guarantor loan for the applicant. What a lot of applicants don’t know is that this upfront fee is non refundable meaning that even if the application doesn’t go through, they will still charge you a fee. Great! So not only do you spend almost £100, you also do not get your personal loan to wipe out your debts!

The other thing to ensure is that you check out who you are dealing with…a simple Google check on the company name will tell you all you need to know about companies offering a loan with a guarantor. Remember, check with them to see if the upfront loan guarantor fee is refundable if it doesn’t go through.

The other thing to consider is the fact that a lot of these firms will try and sell you and your guarantor, insurance to cover the loan. Well, let me state my view very clearly here…any type of payment protection insurance (PPI) at the time you get your loan is a complete and utter rip off. Companies who sell this insurance with a guarantor loan at the point of sale (ie.the time you take out your loan) are making just as much commission of the insurance as they are making off the loan itself! It is an absolute scandal and the sooner the Government understand this shady practice the better for all loan applicants it will be. Our view on PPI is a simple one….It is essential that everyone covers themselves in the event of Redundancy or sickness but it is vitally important that you take the insurance out AFTER the loan application. Otherwise, the loan guarantor company will add the insurance premium (total cost of the insurance) to the total loan amount meaning that you will pay much more for both your loan and your insurance.

Payment protection insurance or Income protection insurance is essential for everyone in these tough times but should not be taken out at the same time as the loan.

If you are looking for a loan guarantor company then ensue you do your homework first as it will pay off for you and your guarantor in the long run.

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