Guarantor loans - A possible solution for people with a poor credit history

Guarantor Loans are a solution for customers who have never had credit in the past or have got a history of bad credit. There are many loan products available in the Uk, but the guarantor loan enables customers who have a good character and willingness to pay the opportunity to raise a loan should they need one. It could be seen as an irony that consumers in the uk who require credit the most are the least likely to get it. privilege.

Customers who have a lower credit score, whatever the reason are generally perceived to be a higher risk to banks and finance houses many lenders are therefore simply unwilling or unable to take on this type of financial liability. 

If you apply for a guarantor loan then you are effectively “guaranteeing” that your loan will be repaid to the lender. The lender is able to protect their exposure by allowing a guarantor to cosign the agreement so that if you, the applicant fails to pay your loan back to the lender they’ll be able to pursue your guarantor also for payment. It gives them a way of mitigating their potential losses so offering loans with a guarantor allows them to lend money to those who normally wouldn't qualify for such services.

Guarantor loans are most likely not for customers who may have a poor credit history but have no genuine intent to improve their situation. It is similar to applying for a job and not being able to supply character references. This type of loan will only be helpful to a customer who can find someone who is deemed a secure and responsible individual to stand guarantor to the loan. The guarantor for the loan is ultimately responsible for the payments should the applicant default, this is the lenders security.

You can borrow from £500 to £7500 and can find out more about this type of loan by visiting us HERE