Category: Loans

Understanding Guarantor Loans: Your Comprehensive Guide

Guarantor loans have gained a lot of popularity with those who need to borrow money, but it’s important that you understand exactly what they are and how they could potentially help you. The more time you take to learn about these loans, the better off you will be overall.

What is a Guarantor Loan?

A guarantor loan is essentially an unsecured loan that requires the borrower to have a second person acting a “guarantor”. This second person will agree to assume responsibility for paying back the loan if the primary borrower cannot for whatever reason. These loans tend to have a payback period from 1 to 7 years, and you can typically borrow any amount from £1,000 to £15,000. It is quite common for landlords as well as mortgage companies to ask for guarantor loans.

Is a Guarantor Loan right for me?

There are a number of things that you will need to consider when trying to determine whether or not a guarantor loan is right for you. These loans are not for everyone, and they are typically best for people who have difficulty getting a more traditional loan due to a poor credit history. More and more people have starting taking out these loans because they are so versatile and open to just about anyone, provided you can get a guarantor.

Applying

You will most likely be able to fill out an application for a guarantor loan online, which means that you don’t have to worry about going down to some office in person. This makes the process of getting one of these loans quick and easy. You will be required to fill out some basic personal information, such as your name, address, social security number and show proof of income. The lender will use this criteria to determine how much of a liability you are so they can decide whether or not to approve your application.

The Guarantor

A guarantor can be just about anyone who is willing to assume responsibility for paying off your loan if you are not able to. This can be a friend, family member or anyone else. Your relationship to the guarantor doesn’t matter at all, and it’s not something that the lender is going to ask about. It is a good idea for you to choose someone that you can count on to pay off the loan if you are not able to for whatever reason though. The person you choose as your guarantor should ideally be someone who you are fairly close to.

Finding a Lender
There are lots of different private lenders that you can get a guarantor loan through, but you will want to take the time to see what your options are like before making a final decision. The more time you take to do this research the better, because it is not something you should rush into by any means. By doing your research and choosing the right lender, you will be able to minimize your chances of getting a bad deal. Things can go wrong very quickly if you select a bad lender, which is why you will need to make a point of looking for one that is highly reputable.

Read the Fine Print

It is imperative that you take the time to read the fine print before signing a contract for a guarantor loan. By doing this you will be able to avoid any problems later on. The contract that you sign will provide you with all of the information you need about the loan, including the total amount and the specific date it must be paid back on. You will also be able to learn about any and all fees and penalties you may be subject to for late or non-payment. It is highly recommended that you take al lthe time you need to look this contract over before signing.

Interest on the Loan

You should also know exactly how much interest you are going to end up paying on the guarantor loan you take out. It is important to keep in mind that interest rates on guarantor loans can be higher than standard secure loans, simply because they don’t require you to put down any collateral in the event that you cannot pay back the loan in full. The interest rate that you pay on your loan will depend on a number of things, including where you love, what your credit history is like, and even the specific lender that you choose to borrow the money from.

A guarantor loan is an excellent option for almost anyone who needs a significant amount of money but has been turned down in the past for more traditional loans. If you have bad credit, you will certainly want to consider applying for a guarantor loan right away.

Things Everyone should know before getting a Personal Loan

If you are thinking about taking out a personal loan, there are some things that you will want to consider before making a final decision. While it’s true that a personal loan can be of great help for lots of people who are in a tight financial situation, you will need to learn the facts so you can make the best possible choice. Getting a personal loan is not something that you will want to rush into.

A Personal Loan is basically like all other loans

You will find that a personal loan is just like all other types of loans in the sense that the borrower pays back the money in fixed instalments over a predetermined period of time. This period of time ranges from one to five years. These loans usually carry fixed interest rates but not always.

There are numerous types of personal loans

It’s also important to keep in mind that there are numerous types of personal loans that you will have to choose from. The two main types of personal loans are secured and unsecured. A secured personal loan requires some sort of collateral/property to be put down in the event that the person is unable to pay back the loan. Typically this collateral is a house or car, though it can be anything of enough value to cover the total cost of the loan.

An unsecured personal loan requires no collateral, so you won’t have to risk losing your car or home if you are unable to pay back the loan. You will want to remember that it can be difficult to get an unsecured loan if you have a low credit score. These loans typically have higher credit requirements due to the fact that there is no collateral required. Either way you will want to make sure that you are able to pay back the money you borrow, regardless of which type of loan you choose.

A Personal Loan may not be your best option

There are tons of different loan options, and a personal loan may not be the right one for you. It is important that you take the time to weigh your options so you can find the best one based on your specific borrowing needs. While it is true that personal loans typically come with lower interest rates than credit cards, you should still keep in mind that it’s not the only option you have. The more time you take to look into your borrowing options, the better off you are going to be.

Choose the right Lender

It is also imperative that you choose the right lender, because there are many different options that you are going to have. Banks are not the only ones giving out personal loans, so you will want to keep that in mind. By spending some time looking for the right lender, you will be able to get the best possible deal on the loan you need. Because there are so many lender options, you will definitely want to make a point of knowing what you have to choose from. Choosing the right lender can mean saving quite a bit of money in interest, so you will have to keep that in mind.

Don’t apply for too many loans

It’s never a good idea to apply for too many loans, because doing so can actually hurt your credit score. When you apply for a personal loan, the lender will check your credit. This is referred to as a “hard inquiry”, which can actually lower your credit score by a few points. The more places you apply, the more your credit score could be negatively affected. You will want to ask lenders about possible rates on your loan before you apply.

Check for any hidden or additional fees

Interest may not be the only cost that comes with your loan, so you will need to make sure that there aren’t any hidden or additional fees before you sign the contract and make everything official. The last thing you want to do is to take out a loan without knowing about all of the different fees that you are going to potentially incur.

The fact is that a personal loan can be of great help to those who are in financial straits, but you will have to be cautious when going about getting one. The more time you take to do the necessary research, the better off you will be in the end. There are many different things that need to be taken into consideration before applying for this type of loan. Those who consider all of these things will be better off for it. In the end you will be glad you did the research.