With financial organisations looking to minimise their exposure when it comes to lending, what happens if you are not a homeowner and therefore unable to apply for a secured loan? There are a small number of options still available to non-homeowners but the most popular and effective are guarantor loans.
How Do Guarantor Loans Work?
Guarantor loans have a specific and unique requirement attached to them which states that to be successful in your application, it is essential that you have a friend, family member (not spouse), colleague or someone who you know very well and who is prepared to guarantee your loan repayments. Because of this, the question of whether you currently own a property, or even the current state of your credit rating becomes irrelevant and therefore a successful application becomes much easier. A significant associated benefit regarding guarantor loans is that if all of the lender’s criteria are satisfied by both the borrower and the guarantor, the vast majority of lenders will pay out within 24 hours of receiving the application. For anyone in need of a swift influx of funds, this ensures that guarantor loans can offer the ideal solution.
Does my Loan Guarantor Need to be a Homeowner?
When applying for a loan with a guarantor, the lender will require the guarantor to satisfy a number of criteria, the first and most important being that they have a reasonably good credit history. If this is the case, then you will have taken a significant step along the road to borrowing the money that you need. The success of your application is not dependent on your guarantor being a homeowner unless you need to borrow over £5000. So for typical guarantor loans in the range of £3000 to £4000 we have lenders who will happily accept non homeowners as guarantors. Any guarantor, whether a homeowner or not, will need to have proof of income and have a clean credit file. Because guarantor loans are unsecured loans, the question is often asked why the guarantor may need to own a property? The answer to this is not a matter of security but it is to ensure that the lender can quickly trace and contact the guarantor in the event that the borrower fails to keep up with repayments.
What Steps Do I take to apply for a Guarantor Loan?
The first step in applying for a guarantor loan is to complete an application form with us. Once you have completed this step, it will allow us to get the very best deal for you from our large panel of lenders. The application process has been designed to provide an instant decision in principle and potentially will be able to provide you with the money that you need in less than 24 hours depending on the amount for which you are applying
Amanda Gillam is Solution Loans's General Manager and has been since 2009. She is also a prolific writer on personal finance issues, and has been quoted numerous times in articles published on 3rd party websites and in press releases. Her...Read more about Amanda Gillam