If you are looking to find the most suitable loan solution for your financial needs, it may be that a guarantor loan is of benefit. This is where a borrower is able to obtain an unsecured personal loan and a second person will be included in the credit agreement. The second person guarantees that the borrower will be able to make the loan repayments.

The borrower has the responsibility of making the payments to the loan firm but if the borrower misses their payments, the finance company will then turn to the guarantor to pay the money owed.

Some reasons that borrowers look for guarantor loan finance include:

• They hold no credit history or they have a poor credit rating
• They have been denied credit from more mainstream providers
• They want to improve their credit rating
• They want to obtain short term cash at a more attractive rate than what is offered by payday lenders

The majority of guarantor loans are for values of between £500 and £10,000 and they can be repaid over a wide range of time, from 12 months to 84 months. This style of loan, with another person guaranteeing the loan, will often provide the borrower with a higher loan value or a loan at a lower rate of interest, because the loan company has an extra degree of confidence about receiving their money.

Guarantor loan finance can be arranged quickly

Even though there is an extra persona involved with the process, there is no need for guarantor loan finance to take a long time to arrange. With electronic signatures and the passing of digital information being valid, many loan companies are able to pay out funds on the same day. There are some financial companies who will pay the money to the guarantor and it is then up to the guarantor to provide the funding to the borrower. It is important to examine the details, terms and agreements of any guarantor loan before finalising an application.

With respect to verifying that the guarantor is reliable for payment, some firms will look for the guarantor to be a homeowner. However, this is not the case for all firms and in many cases; guarantor loan finance can be arrange when the guarantor has a very good credit score. There is a degree of flexibility with guarantor loans that are of benefit to the borrower and to the lending company. This is why there has been an increasing level of demand and interest in these loans of late. The general conception about guarantor loan finance is that they are a more attractive loan option that what is provided by payday loan companies, making them a natural choice for many individuals.