{"id":44,"date":"2018-06-20T14:23:24","date_gmt":"2018-06-20T14:23:24","guid":{"rendered":"http:\/\/www.unitedfinances.com\/blog\/?p=44"},"modified":"2019-07-20T15:10:36","modified_gmt":"2019-07-20T15:10:36","slug":"a-complete-guide-to-guarantor-loans","status":"publish","type":"post","link":"https:\/\/www.unitedfinances.com\/blog\/a-complete-guide-to-guarantor-loans\/","title":{"rendered":"A Complete Guide to Guarantor Loans"},"content":{"rendered":"

This is all you need to know about guarantor loans from the experts. Including what they are, how they work and how to apply for a Guarantor loan.<\/i><\/span><\/p>\n

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Back in the late 20<\/span>th<\/sup><\/span> century, before the creation of digital credit scores and computers, loans were given to individuals by banks based solely on trust. Whilst a lot has changed since then, guarantor loans have made a comeback \u2013 with traditional lending put at the centre. Guarantor Loans<\/span><\/a><\/span> can be ideal for people with bad, poor or no credit history. All you need is someone who can be your Guarantor. These type of loans give people a chance to apply for a loan without paying the ridiculously high interest rates of payday loans or some store cards and credit cards. A leading Guarantor Loan company – TFS Loans<\/span><\/a>, offers guarantor loans for those with bad credit, the chance to borrow at a Representative APR of 39.9%. <\/span><\/p>\n

There are significant differences between different loan types that you need to be aware of before taking one out.<\/span><\/p>\n

This blog post will go through everything about Guarantor Loans<\/span>. From what a guarantor loan is, to how to qualify for one. Our aim is to provide potential customers the essential information they need before making a decision. By better understanding a loan, you\u2019ll be able to make the call on if it is right for you, or not. Welcome to your free guide to guarantor loans.<\/span><\/p>\n

What is a Guarantor Loan?<\/b><\/span><\/p>\n

We\u2019ll be breaking down what guarantor loans are<\/span><\/a><\/span> in this section. In short, guarantor loans<\/span> are personal and unsecured loans<\/a>. Personal loans are granted by banks and other lenders to be used for almost anything \u2013 as long as it\u2019s legal. The term unsecured, regarding loans, means that you don\u2019t have to put up collateral against the loan. Unlike mortgages, which are secure loans, where your house is the collateral for the loan \u2013 failing to make repayments on your mortgage can lead to your home being repossessed. This usually means that unsecured loans are for smaller amounts of money, usually between \u00a31,000 and \u00a315,000. This means that personal loans are used for weddings, car loans, debt consolidation etc. they\u2019re ideal for smaller things that you need but can\u2019t afford to pay in one go.<\/span><\/p>\n

But how do guarantor loans differ from other kinds of small personal loans<\/a>? Well, they\u2019re designed to disregard the applicant\u2019s credit history \u2013 yes, you read that right. Your credit score has very little impact on your application for a guarantor loan. In fact, guarantor loans are really only ideal for those with bad credit. Guarantor loans have considerably lower representative APRs than other bad credit lenders. The loans that TFS<\/span> offer, have a representative APR of 39.9% \u2013 but it\u2019s dependent on how much you want to borrow, and how long you want to borrow it for. Rates vary from 29.9% to 69.9%. Using their loan calculator<\/span><\/a>, you can see what your interest will be on the loan amount you want to borrow.<\/span><\/p>\n

Is a Guarantor Loan Right for Me?<\/b><\/span><\/p>\n

Everyone\u2019s individual financial state is different. Different credit scores, different bills to pay, and different options available. As we\u2019ve said before, guarantor loans may only suit those with bad credit. There are more lending options available to those with a good credit score, so you can afford to look around for a loan. Banks and other lenders judge their loan applicants based on their credit score. Then, they\u2019ll offer you a loan at a rate that reflects your credit score. 39.9% APR Representative.<\/span><\/p>\n

However, there are not a lot of options available to those with bad credit, especially for larger amounts. Payday loans<\/a> are costly methods to borrow smaller amounts of money, but there is not a lot out there for mid to large amounts of money. The maximum amount that most payday loan companies pay out is around \u00a31,000, not ideal for a wedding or car loan. However, with a guarantor loan, you can borrow larger amounts of money, even with bad credit. TFS Loans<\/span> currently offers the largest Guarantor loans in the UK \u2013 up to \u00a315,000. <\/span><\/p>\n

Whilst guarantor loans are ideal for those with bad credit, if you take out a loan you cannot afford to repay, it can cause you serious money problems. At TFS Loans, we advise you seek independent financial advice before taking out a loan.<\/span><\/p>\n

What can I use my loan for?<\/b><\/span><\/p>\n

Guarantor loans are personal loans<\/a>, meaning they can be used for almost anything \u2013 as long as it\u2019s legal. Many of our customers use them for whatever purpose they see fit -including debt consolidation. Using your loan to consolidate any outstanding debt makes managing payments a lot easier. If you\u2019re struggling with repayments on multiple loans or credit cards, a debt consolidation loan can help merge those costs into one manageable monthly payment. Making it easier to keep track of and stop your interest charges increasing on other loans.<\/span><\/p>\n

Some find themselves using their loan for a car, to put towards a wedding or to use for a holiday. The loan is yours to use as you see fit. Self-employed business owners even use their loans to put towards new ventures or to finance them through a tough patch. A guarantor loan<\/span><\/a> is yours to use, for whatever you need. Just make sure you\u2019re in the right position to borrow money and more importantly, you can afford to pay it back.<\/span><\/p>\n

Who can be a Guarantor for a Loan?<\/b><\/span><\/p>\n

If you\u2019re looking into taking out a guarantor loan, you\u2019re probably wondering what the catch is? The clue is in the name\u2026 You\u2019ll have to provide a guarantor<\/span><\/a> with your loan application. For the lender, this guarantees the loan is going to be repaid. Your guarantor will sign to agree that should you be unable to meet a monthly repayment on your loan, your guarantor will cover it for you. <\/span><\/p>\n

As for a guarantor\u2019s criteria, TFS ask that they are:<\/span><\/strong><\/p>\n