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.