10 great reasons to use a loan guarantor

A loan guarantor is someone who puts themselves forward to back up the loan application of someone else. So in other words, Applicant A applies for a loan and receives the loan amount and also makes the monthly repayment. The guarantor simply ensures that if the monthly payment isn’t made or the applicant doesn’t repay the loan that he or she will, effectively guaranteeing the loan to be repaid, hence a ‘guarantor loan’.
Here we will look at 10 great reasons why you should consider a guarantor loan.
1. You have a bad credit history or a history of poor credit.
2. You are receiving benefits to ‘top’ up your monthly earned income
3. You are a student who only works part time.
4. You need to get money to pay for your 1st month’s rent and rental deposit
5. You are not old enough to qualify for a loan (some lenders insist you need to be 21 years of age to qualify)
6. You want to repair your credit history.
7. You do not have any credit history at all (this is a problem for people who have never taken any credit before and can be as problematic as having a poor credit history.
8. You are a tenant and do not own your own property.
9. You are a foreign national who does not have any credit history or is unable to obtain any credit due to not being in the UK long enough.
10. You simply do not want anymore credit searches to show up on your record.

As you can see, there are a number of good reasons why you should consider a guarantor loan and there is no longer any stigma attached to getting a loan with a guarantor. The other thing that has changed with the advent of this type of loan is that most loan providers will now lend up to £5,000 and can even pay the loan directly into the applicant’s account, not the guarantor’s.

In terms of paying the loan back and in particular, if an individual gets into difficult repaying the loan, then lenders have a moral and ethical responsibility to ensure they give borrowers every opportunity to repay the loan and they must work closely with the borrower to work out an appropriate repayment plan for the loan. This may even require the lender to accept a smaller repayment figure each month which may be achieved by suspending or reducing the interest payable on the loan after all, the whole point of lending money is to ensure that the money gets repaid otherwise lenders will not make any money at all!
The final thing to note is that many loan providers will pretend to find you a loan and then tell you to pay a fee for this ‘loan finding’ service. Please don’t fall for that because it is absolute rubbish and a con and you are unlikely to get your cash back and worse still, you still won’t get the loan you originally applied for!