How does a Guarantor loan work?
Historically, Personal loans (whether they are secured or unsecured loans) are provided to individuals based on that individuals personal circumstances. Lenders and product providers will base their decision on whether to lend or not upon the applicant’s credit profile and to help them do this, they use a form of decision making called ’scoring’ or credit scoring to give it its full title.
However, the guarantor loans that we provide give you complete control as we do not believe that just because an applicant has had adverse credit issues in the past, it should stop them getting a loan or other finance in the future. With a guarantor loan, the applicant provides a person who can guarantee the loan repayments, if the applicant fails to keep up with those repayments. The other thing to bear in mind is that nobody is likely to act as a guarantor unless they are pretty confident that the applicant will repay the loan back. Because of this, most guarantors tend to be members of the applicants family or at the very least, a close friend of the family.
The reason these people make good guarantors is because they are pretty good judges of whether the family member is likely to repay or not and because a guarantor is provided, a credit score will be used at all to make a lending decision. Simply put…provide a guarantor and you can have the loan you require.
Who can apply for a guarantor loan?
There are very few instances where we cannot lend to an individual as long as a guarantor is provided. We can accept applications from people who have normally been turned down by other lenders or who have circumstances not considered by high street lenders. The beauty of a guarantor loan is that council tenants, people with poor credit histories and people on benefits can all apply for a loan.
