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While a guarantor loan may improve your chances of getting your unsecured loan if you have bad credit you may find it hard to find the right guarantor. So what's needed is a type of personal loan for people who have bad credit but with no guarantor needed.
Thankfully this type of loan is emerging and Solution Loans has access to many of them through it's free enquiry service.
With a guarantor loan the role of the guarantor is to provide a way for a lender to feel more certain that they will have their loan repaid. It's all about risk. Being able to rely on a guarantor to step in means that the lender doesn't have to charge as much interest (to cover the risk) as they might have.
So, the first thing to consider is that your bad credit loan with no guarantor will probably have a higher APR%. Indeed while the APR% for a guarantor loan is in the region of 40 - 50% the rate for an equivalent loan without a guarantor could be in the region of 70% or more.
Well, if a guarantor is an option for you then there's nothing to stop you comparing quotes from the different types of lenders and then making the judgement that suits you. If you like the idea of a lower cost loan and don't mind asking a family member or friend to act as your guarantor then you'll have more choice.
If you can't find a guarantor then does that mean that you'll always pay more for a bad credit personal loan?
With the new style personal loan bad credit lenders are bringing in sophisticated technology to allow them to assess the specific risk of lending to you. They will then price the interest rate for that loan on the basis of your risk. And you can do this online and get an immediate quote - and do this through our website too!
Guarantor lenders are not yet really "pricing to risk" so the rate you pay is more of a "one price fits all". But this opens up an opportunity for you if your credit file has issues but they're not necessarily that bad.
If you have been refused by high street lenders and know you have a credit issue we would suggest this is a course of action:
It is possible that if you only have modest credit problems that you could get a personal loan at a lower rate than a guarantor loan AND not have to provide a guarantor. Now that's a win win! Good luck.
If you need help comparing loan offers and terms then we suggest you speak to a qualified financial advisor.
When it comes to getting you your bad credit loan our online service is second to none. In fact Solution-Loans.co.uk has scored based on 196 ratings & 29 user reviews for its bad credit loans service.
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