Understanding Guarantor Loans
Whether for a financial emergency or any other type of financial needs, getting a guarantor loan is a viable and practical way to avail quick cash. It is especially ideal for people with bad credit history who've been refused a loan by banks and other major lenders. But like with any type of debt, taking out a loan involves careful planning and understanding of the financial product. This guide will help you with the latter.
Defining Guarantor Loans
Guarantor loans are personal loans designed to provide borrowers an opportunity to avail quick cash for immediate financial problems. To get approved for a loan, you must have a guarantor with good credit. He or she should be of legal age, a resident of UK and has proof of a regular income.
Loan Term and Amount
Because there is a guarantor involved, guarantor loan lenders are able to offer a more flexible loan amount and loan term. With a guarantor loan, you can borrow from as low as £500 or as much as £25,000. As for the repayment term, it can be between 1 year and 5 years which you can set according to how much you can afford for monthly repayment dues.
When it comes to cost, guarantor loans are among the cheaper options when it comes to quick personal loans online. The average Representative APR for guarantor loans is set at around 50% which is definitely cheaper than payday loans at 1,000% or logbook loans at 400%.
Click here for a better understanding of APR and how it affects your guarantor loan's cost.
Another advantage of guarantor loans is the minimal requirements involved. To be eligible for a loan, all you need is to meet the most basic requirements which include being of legal age and a resident of UK. You don't have to be fully employed. As long as you can provide proof of regular income and you have a guarantor who's willing to back you up, you are more than ready to get approved.
Is it for you?
If you have bad credit and you don’t have any asset to use as collateral for a loan then a guarantor loan is a great alternative. Instead of getting unsecured loans with hefty interest rates, you are better off finding a guarantor with good credit and avail a cheaper loan option for your varied financial needs