Do you need finance but are struggling to get it because of a bad credit history? Guarantor loans offer an alternative to traditional unsecured lending that makes it easier for anyone with either a poor credit rating or no credit history to borrow.

Simple to apply for and flexible to use, this type of finance provides an option where there may not be any others and gives anyone looking for cash the opportunity to access it. If you’ve struggled to get accepted by high street banks and the usual lenders a guarantor loan could be what you’re looking for.

Probably a Better Financial Deal

If your credit applications keep being rejected you may assume that your borrowing options are limited. There are a range of bad credit unsecured loans available but not all of them offer particularly good terms and conditions or flexibility when it comes to getting the support that you want.

A guarantor loan is often a better choice than many of the other bad credit unsecured loans available. You’re not only likely to pay less for what you borrow but you could enjoy better terms too. And this type of finance is definitely a much better alternative to loan sharks or other illegal lenders, as it is properly structured and regulated and reputable lenders are involved.

All about guarantor loans

No Security or Assets Required

Many of the usual borrowing options require a borrower to have either good credit history or an asset that the loan can be secured against. Secured loans, for example, can be a good option if your financial history is a bit patchy. However, they require the applicant to own a property with a mortgage in order to be eligible. Logbook loans are also an option but are only available to those who own their vehicle (which excludes those whose cars, vans, etc are on certain types of finance).

Guarantor loans, on the other hand, are accessible even if you don’t have an asset such as a house or a car. Rather than requiring an asset to secure the borrowing against, the security of a third person (the guarantor) is used to convince the lender to enter into an agreement with you. All you need to have to apply for a guarantor loan is someone who will agree to back your application so that if you’re not able to cover the repayments yourself, the lender still gets their money back. That person can be anyone – preferably someone you know and trust and someone who fits the minimum criteria:

  • At least 18 years old
  • Probably employed
  • Earning over a specific salary (varies by lenders)
  • Either a homeowner or non-homeowner

How to Apply

Providing Future Credit Options

If you’re struggling to get finance now then it may be difficult to see how this situation will ever improve in the future. Guarantor loans can help here too. One of the simplest ways to improve your current credit history is to start writing a new one – to dilute away old bad news with new good news. But this can feel virtually impossible to do if you’re constantly being denied credit.

With a guarantor loan you’ll be able to start making progress on amending your credit score with finance that you can borrow and repay on time. This will not only mean that you now have the money that you need but also that your credit history shows cash has been borrowed and repaid without any issues.

Over time, as you demonstrate a more positive credit behaviour, you’ll be able to access better deals at lower interest rates etc and have many more choices when it comes to borrowing. A guarantor loan that you repay in full and on time when each payment is due can help you today to start correcting past poor performance.

Learn about Guarantor Loans

Flexible and Affordable

  • Guarantor loans are more affordable than other bad credit unsecured loans. They can also be more flexible than many more mainstream borrowing options.
  • Borrow what you need. The maximum amount you can borrow with this type of finance is usually around £15,000. So, there is plenty of flexibility when it comes to ensuring you have the finance that you require.
  • Repayment options. You’ll need to ensure that you make the full payment each month, as agreed with the lender. However, you do have more flexibility when it comes to repayment than you might with a traditional bank or a different type of unsecured bad credit finance. For example, if you want to repay early this is easy to arrange – so, if you find yourself unexpectedly in funds, it’s not a problem to use this to make larger repayments and so reduce interest costs.
  • A more affordable way to borrow. Guarantor loans are designed to be affordable and are often a better choice than payday loans, which have much shorter terms. With guarantor loans you can usually choose to repay over a much longer period of time – up to 60 months. This can make all the difference when it comes to affordability, as it’s easy to opt for smaller monthly repayments over a longer time period of time so that you never miss a single one.
  • Speed of approval. You might be looking for money to help you cope with an emergency or you may have a wide range of reasons for wanting to get access to finance, fast. Even where there is someone providing a guarantee, the application can usually be approved quite quickly. So, if you apply for guarantor loans you could see your application processed within just 24 hours. As soon as the application is approved, the cash can be paid out.
  • A wide range of options. Lots of lenders offer this type of finance today so you’re not restricted to a small pool of lenders to choose from. Look for options where there is no fee involved and where the terms and the interest will make the loan affordable for you to borrow.

These are just some of the reasons why a guarantor loan could help you. Whether you’re looking to correct past credit mistakes or arrange fast financing, guarantor loans are the ideal choice.

 

Guarantor Loans Guide

If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.

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Written/Reviewed by: Amanda Gillam