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A guarantor loan is an excellent option if you wouldn't qualify for a loan on your own. A guarantor can co-sign your loan and their income and credit score will be taken into consideration by the loan provider. This is a good way to qualify for a loan with a low interest rate and some fairly low fees if you do not have a good credit history or do not earn enough money for the loan provider to be comfortable with approving your application.

You Must Remember This

The downside of using a guarantor for your loan is that the guarantor will

become responsible for making the loan payments if you default on your loan.

This can make finding a guarantor difficult, but loan providers will give you a

much better deal on the interest rates and the fees since they will consider that

they are not taking as much of a risk.

 

You need to compare guarantor loans and the different options they offer if

you are thinking about a guarantor loan. You might not qualify for a loan with

every loan provider or might not get the same interests and fees. You should

learn more about different loan providers and take the time to compare your

options, if possible with the help of the guarantor since they need to know

what they are getting into.

 

Please Note – It is essential that you take no chances when it comes to applying for a loan and as such, you should only use accredited lenders. For more on the regulatory authority governing lenders in the UK, please check out the following link - https://en.wikipedia.org/wiki/Financial_Conduct_Authority

 

Essential Loan Requirements

The first thing to look at is the requirements loan companies want you to meet in order to qualify for a loan with a guarantor. Even though they will look at the credit score and the income of your guarantor, they might still want you to meet a few requirements as well. This could eliminate some loan providers right away.

 

You also need to find out about the credit and income requirements your guarantor has to meet. Talk to your guarantor to find out how much they earn, what their credit score is and what kind of assets they have so you can easily compare loan providers.

 

Some loan providers will give you the possibility to have more than one guarantor for your loan application. This is a good way to lower the risks the loan company is taking and means you might be able to get a lower interest rate and lower fees but not all loan companies will offer this option.

Checking the Smallprint

Another very important thing to look at is the definition of defaulting used by the loan company. The guarantor will become responsible for making the loan payments if you default on your loan, but some loan providers will consider that you defaulted on your loan if you haven't made a payment in a certain number of days or if you missed a specific number of payments. Others will look at the balance of your loan.

 

It is important to compare your options since choosing the right loan provider will improve your chances of being approved and could also help you save money on interests and fees. You should compare loan providers with the help of your guarantor since they should have a say in this decision.

 

You can also find out more via the following video:

Compare Guarantor Loans To Save Money

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