Who is the Best Guarantor for my Guarantor Loans?

If you have decided that a guarantor loan is a good choice for you, then you will need to make a big decision. You will need to decide who will be your guarantor. You will need to find someone that fits certain criteria and this can be tricky. Knowing what the criteria is will be a start but then you need to find out whether the people you are hoping might help you will fit into these criteria.

They have a good credit record – You may not know whether people you know have a good credit record and they may not even know themselves. It could be worth finding out how to look up credit records so that you can check. You will not be able to look at theirs as the information is private but if you look up your own you will then be able to know what the process is and get them to try it to see what theirs is. They may know of course, but if they do not then it could be a handy way to find out. You may be wise to also ask the lender about their expectations with regards to credit records. They may have certain criteria that they need the guarantor to fit in to and if you know what these are then it will be easier for you to check whether your choice of guarantor will be suitable.

They have enough money to cover the repayments if needed – just because they have a good credit record, it does not mean that someone will have enough money to be able to cover those repayments. It is possible that they may have to pay every repayment for you and although you will not want this to happen it is best to plan for this. Therefore, you will need to talk to them about how much you expect the repayments to be each month, how long the loan will last for and whether they will be able to afford to pay for it. This can be a difficult conversation to have as you will not want them to imagine that you may never be able to pay and you will also want them to be happy to agree to it. They might not if they think that you will not be making any effort to repay. You will therefore have to explain that this is a worse case scenario and that you are really hoping that you will be able to make all of the payments but you need to make sure that they are able to pay them if necessary.

They are willing to help you out – you will also need to find someone that will be willing to help. You will find that some people may not do this. It could be that they feel that they could get into financial trouble if they do help you or they may just not have enough money available to be able to do it. There may also be other issues. They may not like to lend money at all, they may feel it might cause jealousy or they might worry that it will impact your relationship. The biggest problems are likely to be if you miss a repayment and they have to pay it, what happens then? You will need to decide whether you will pay them back for that and when you will pay them back. It might be wise to have this discussion before they sign up to anything. It might be wise for you to agree to pay them back but think about a suitable time. This might need to be once you have finished repaying the loan as while you are repaying it, you will need to make sure that you have enough money for those repayments.

This can be a lot trickier than you might think and you will need to give it some serious thought. You might even need to come up with a list of people and ask each one in turn to see whether they will be able to help you. Compiling the list can be tricky as well as you may not really know who to choose. You could chat about it in front of people you think might help and they might volunteer but not everyone is like this and they may wait to be asked. You will need to think about how you will ask them as well, to convince them that it is a good idea and that it will really help you out. Some people might be far more willing than others and it might be that you will have to work hard with some. This might be off putting and you might feel that you would rather ask someone that you think is more likely to agree to it.

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How do Guarantor Loans Compare with Other Ways to Borrow?

If you know very little about guarantor loans you may wonder how it compares to other ways of borrowing. You might think that there are so many different choices that a guarantor loan will not be useful to you so you need not find out about it. However, there are some things that set this loan apart from others. It is good to be aware of these and then you will be able to decide whether it is a loan that you think will be useful for you.

Available for poor credit

There are not that many loans that are available for anyone that has a poor credit report. This means that if you have had problems with repaying loans, paying bills or things like that in the past or have no past history of doing these things then lenders will not trust you and will not want to lend you any money. This can make borrowing really difficult for some people. Sometimes even if you think there is no reason why you should be turned down for a loan you might be. This could be because you are self-employed, do not have a permanent job or even if you have a partner that is not good with money. Therefore, it could be useful to know about what sorts of loans are available to you.

Can borrow thousands of pounds

Many people think that if you take out a loan from a lender such as Happy Penguin UK, which is available to those with a poor credit rating then the amount that you can borrow will be relatively low. People tend to be used to the idea that you will be able to only borrow a few hundred pounds, which is often the case with a payday loan. However, guarantor loans allow you to borrow much larger sums of money perhaps around ten thousand pounds. This means that if you need a significant chunk then a guarantor loan could be really helpful for you. So if you need to buy a new car, pay off a big series of bills, find a deposit for a home or something like this, then you could find that this sort of loan will be really useful for you.

Repay in instalments

The best known no credit loan is a payday loan and we are used to the idea that it has to be repaid in one lump sum. This can put us off this type of loan, especially if we want a larger amount of money as we may worry that we will not be able to afford the repayment. However, a guarantor loan is repaid in instalments over years so it should be affordable for you. Of course, it is wise to calculate how much you can afford to repay and then find out how much the repayments will be on the loan so that you are sure that you will be able to afford them. You will find that the amount that you need to repay each month will vary depending on the lender that you choose and the amount that you borrow. Therefore, even if initially you do not think that you can find an affordable solution, there may be one there that you have not yet spotted.

Have help if cannot repay

It is very rare for you to be able to get help with a loan if you cannot repay but this is exactly what you get with a guarantor loan. If you do not have enough money to make the loan repayment, then your guarantor will be asked for the money instead. This will enable you to be able to relax a bit and not panic about always having the money that you need. Of course, you will need to make sure that you are able to make those repayments if you can. You will not want your guarantor to have to pay a big proportion of them for you. However, it can be really reassuring to know that there will be someone to help you out if you need them to. This could mean that you will be able to cope if you get a change in circumstances such as losing you job, illness or having some big expenses.

So, as you can see there are quite a few differences between this type of loan and many others. It is good to understand what they are so that you can decide whether this might be a good option for you. You may think that you will never be in the situation where you will need this, but it is very hard to know exactly how our future will turn out. We need to be prepared for everything and if we know what options we might have then we will be prepared and ready. It should help us to feel less stressed should the situation arise when we need money like this.

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