If you have heard about a guarantor loan but are unsure of how it works, don’t be afraid to ask questions. While this is a style of loan that is becoming extremely popular in the UK, offering a range of benefits that aren’t available from other types of loans, if you aren’t aware of this style of loan, it is only natural that you will have a few questions about a loan. If you are thinking about taking out a loan, it is vital that you are comfortable and confident with what the loan so make sure that you know how does a guarantor loan work?
A guarantor loan is an unsecured style of loan where a second person is required to act as your guarantor. While every guarantor loan is unique, you will find that the loan can be taken out for a number of years, even up to five years. The amount of money you can borrow varies from company to company but you will find that some firms offer guarantor loans up to sums of £10,000 or even £12,000.
A guarantor loan is not a payday loan
It is important to be aware that a guarantor loan is not a payday loan. The rate of interest associated with a guarantor loan is much lower and there are not arrangement fees or fees that need to be paid up front when it comes to a guarantor loan.
If you have poor credit this is the loan for you
If you have a poor credit rating, a guarantor loan is likely to be of interest or benefit to you. Also, you will find that taking out a guarantor loan will help you to borrow a larger sum of money than you would normally manage to do with other types of loan. There are a number of key benefits associated with this style of loan so if you are looking to find the loan that is best for your needs, this is definitely the loan that is right for you.
The choice of guarantor is a vital component of guarantor loans. Virtually anyone can be a guarantor but there are some restrictions in place. The guarantor cannot be linked to you in a financial manner, and there are age restrictions. Some companies require the guarantor to be at least 18 years old while some lenders want the guarantor to be at least 21 years old. Some lending firms don’t have an upper age limit for guarantors while some companies have an upper age limit of 75.