What is a guarantor loan?


What is a guarantor loan? is a question we often get asked.

Well, in simple terms, a guarantor loan is where the person applying for a loan cannot and will not be accepted by the lender they are applying for. Some reasons why a person will not be accepted are listed below:

A tenant who has no home to offer as security
Unemployed person with no regular income
Person on benefits
Part time worker
Bad or poor credit history
Student or mature student
Person who is too young to be considered by a bank or other lender

Applying for a guarantor loan

You can apply for a loan with anytypeofloan.co.uk here.

This list isn’t exhaustive, more of an indication of the type of person who will struggle to get a loan in their own right. However, regardless of these problems, people now have many more options open to them and a guarantor loan is just one of the most viable options open to them. The key with applying for any loan is to make sure you do your homework first as lenders and other product providers will penalise those applications that they feel have not been completed accurately. One simple rule of thumb is: if they ask you for something on the application form it is because they need it, they are not doing it for fun or to try and hack you off.

Ok, so we have discussed the fact that the application needs completing in full and in some detail as well. But who completes the application? The applicant? The guarantor? Well, the answer is both need to complete the form. Think of it this way. The applicant will be getting the cash on day 1 and the guarantor will get nothing. However, if the applicant decides not to pay or can’t pay, then the guarantor will have to cough up the cash on behalf of the applicant. It doesn’t even matter if you are no longer on speaking terms with the applicant because once you have signed on the dotted line as a guarantor, you will be liable for the applicants debt as long as it is outstanding. There is no excuse for naivety either as once you have signed, you have signed. End of.

I will post more details in a few days time on how to negotiate a guarantor loan.

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