Guarantor Loans


Guarantor loans are the easiest and quickest way to obtain money if you have a poor credit history, no credit history, you are a tenant with no property to offer as security, you are unemployed or you are on benefits. The beauty of this type of loan is that you really can have a pretty dismal credit history and still be accepted for a guarantor loan. CCJ’s, defaults, arrears on a mortgage , credit card, rent or any form of loan or credit will not preclude you from getting a loan with the use of a guarantor and below I will explain why.

A mortgage lender or loan provider will normally assess every client on their ability to repay a loan. They will check you out to make sure that you do NOT have the bad credit problems that I mentioned earlier and they will absolutely refuse you based on the fact that if they did lend to you, not only would they not get their money back from you in the form of monthly repayments, they wouldn’t even be able to repossess any of your assets because loans for tenants mean that there is no property or car or other asset to take back in lieu of the payment you owe them. This type of loan is known as an unsecured loan because in simple terms, it is not secured on any of your assets. In laymans terms, the lender has nothing to claim back if you default on your loan which also means from a lenders perspective, that this is a much riskier type of loan for them to offer. That is why there are not many unsecured loans approved, compared to secured loans (which is where a house is offered as security for the loan, ie. if you default on the loan, then the lender can repossess your home in lieu of the debt. Not good but this happens more and more as people suffer greater credit problems)

A guarantor loan means that someone else will be guaranteeing to the lender that the loan in question will be repaid, hence the name of the loan being a ‘guarantor loan’. I will feature more about how a guarantor loan works in the next few days, with particular focus on the person who will be acting as the guarantor.

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