At the time of requirement of funds, you need them immediately. The usual source is your own savings or help taken from friends and family. Sometimes, both these options are not available. In such circumstances, you can fulfil your needs by using affordable guarantor loans from a direct lender in the UK at a lower rate.
These loans are a dependable source of funds that you need for any personal or business purpose. The application process in direct lending is speedy and 100% online. You get instant approval decision that makes the loan process predictable.
At 24loanswales, we provide approval decisions based on the joint repayment capacity of the borrower and the guarantor. This is what makes the guarantor personal loans attainable on flexible terms of loan amount and tenure. Apply now and get money when you need it most.
A guarantor loan is a type of long-term loan solution in which the third party, i.e. the guarantor, plays the most important role. Borrowers with no credit history or limited credit history mostly resort to these loans.
The presence of a guarantor allows the borrower to borrow a large amount at a lower interest rate. The presence of a third party allows for mitigating the risk of late payments. The guarantor is likewise responsible for paying the loan.
If you, as a borrower, fail to pay timely instalments, the guarantor bears the legal responsibility. Guarantor loans online offer better terms than conventional loans.
DID YOU KNOW?
Guarantor loans can be unsecured or secured but unsecured loans are most common.
- Are guarantor loans cheaper than unsecured loans in the UK?
On many occasions, guarantor loans prove more expensive than unsecured loans. The primary reason is that guarantor loans are suitable for those with bad credit scores, and therefore, lenders minimise that risk by keeping slightly higher interest rates. On the other hand, unsecured loans are more favourable for those with fair or good credit scores. Loan providers can trust them, and therefore, they don't need collateral. Consequently, they keep interest rates on the competitive side.
- How long does it take to get a guarantor loan in the UK?
The approval decision for your loan application does not take too much time. We can give acceptance within 15 minutes, and on the same day, you will receive the desired funds in your bank account. Sometimes, delays can happen, but we will keep informing you of this.
- Can I repay a guarantor loan early in the UK?
You can make early repayment of a guarantor loan, and by doing this, you can save plenty of interest rates. You can repay in full or in part, depending upon your capacity. We also back you by not charging any early repayment fees. Close the loan faster and boost your credit score.
- What documents are required for guarantor loans in the UK?
The following are the requirements for the guarantor loan documents in the UK to qualify for funds.
| Document for borrower | Documents for guarantor |
|---|---|
|
|
As per the lending conditions of the guarantor loans, both the borrower and the guarantor have decided responsibilities, but both are interdependent for loan repayment. Hence, it is vital to gain clarity about their individual as well as joint responsibilities. If you are planning to apply for the loan, knowing about this comparison will help you decide better and faster.
| Criteria | Borrower | Guarantor |
|---|---|---|
| Must have good credit | Not mandatory | Usually, compulsory |
| Responsibility for repayments | Yes | Yes, in case the borrower fails to repay funds. |
| Income proof needed | Yes | Yes |
| Impact on credit score | Yes | Yes, if instalments are delayed or skipped |
| Can be a family member | Yes | Yes |
Many of our borrowers ask who can be a guarantor for their loans. Therefore, if you are applying for guarantor loans, your guarantor must fulfil the conditions given below. Only through the following parameters can one make a third party your guarantor.
Age-A person below 18 years of age cannot become a guarantor. This is the minimum age criterion. Therefore, keep the age criteria in mind before making someone your guarantor.
Financial stability-Only a financially stable person can become a guarantor. This includes individuals with a regular income. Apart from this, it is also important to have an ideal debt-to-income ratio and good conditions.
Residency proof-Any person who lives outside the country cannot become your guarantor. That is why the guarantor must have proof of residency as the approval decision comes accordingly.
Relationships with the borrower -Lenders accept guarantors who have a close relationship with the primary borrower. Usually, family members or close friends act as a third party. Any random person becoming a guarantor can affect the approval decision.
Certain circumstances do not allow an individual to act as your guarantor. You must know about these before applying for this loan solution.
WHY GUARANTOR LOANS ARE POPULAR ?
Some specific features of a guaranteed loan give you an idea of its uniqueness. Knowing about a loan before applying for it helps you make a rational decision.
If you want to get guarantor loans at low APR, you need to know the features of this loan solution.
The above features make these loans a speedy option to obtain funds. For all those looking for guarantor loans on same-day payouts, applying for this option is a wise decision.
Loans with guarantors have plenty of benefits, especially for those with poor credit scores. Still, they have some significant risks, too. These risks are for both the borrower and the guarantor.
Risks for the Borrower
Risks for the Guarantor
An important suggestion: 24loanswales suggests its borrowers apply for guarantor loans when no other option is there. Besides, both borrowers and guarantors must understand the loan norms carefully.
A straightforward process is required to apply for the loans with a guarantor. Fill out the online application form, which contains the basic financial and personal details of you and the guarantor.
These financial details are regular income proof, 6 months' bank statement, residential address and loan amount. Your consent for a credit check is also necessary. These details go under scrutiny to process the loan further.
After this, you will receive an instant decision of approval. You get approval on a loan amount according to your joint repayment capacity and the guarantor's. Along with this, you receive a loan agreement.
As soon as you give consent to the agreement, the loan amount is disbursed to your account. After this, your instalments start getting auto-debited from the next month as per the conditions mentioned in the agreement.
The loan process for these loans takes a maximum of 24 hours, considering the bigger loan amount. Just like payday loans offer speedy funds but a small amount, guarantor loans take a day but provide a big amount.
- How to increase approval chances for guarantor loans?
Use the following guarantor loan approval tips in the UK and receive timely funds.
The above suggestions are considerable to improve guarantor loan chances in the UK, and that too at budgetary loan offers.
Yes, you can avail of guarantor loans for bad credit from a direct lender, even with a low credit rating. Guarantor loans are actually useful for those who have a less or poor credit history.
But remember that your guarantor should have a good credit score. If the credit score of your guarantor is not good, you cannot apply for the loan. After all, a good score from the third party guarantees timely payment.
Apart from this, due to a bad credit situation, you also have to fulfil some conditions. Submit the bank statement for the last six months. It should show that in the last month, you started paying other dues and obligations on time.
If you have strong repayment capacity, you can even get loans for tenants with bad credit on individual creditworthiness. This means that having a guarantor is even easier. A little attention to credit purchase power can make a big difference.
- Is it possible to get a guarantor loan without a credit check?
Yes, it is practically possible to get a guarantor loan with no credit check if you have a strong current repayment capacity. However, a detailed credit check lets a lender better personalise your loan offer as per your creditworthiness. But if you still want to borrow without a credit check process, getting no credit check guarantor loans is not impossible.
A guarantor loan can be effective in improving your credit score, but it can only be possible if you manage it sensibly. Here are some suggestions:
Make payments on time: If you make timely payments, lenders start trusting you, and it will boost your credit score, too.
Build credit history: A guarantor loan helps you to build a positive credit record if you have no or poor credit history.
Illustrate responsible borrowing: Manage the loan responsibly and demonstrate to lenders in the future that you are a low-risk borrower.
Mix your loan to your credit profile: If you are managing a loan well, then add that to your credit profile that will improve your credit score.
You should be aware of a few things, as it is essential in managing the loan. These include:
To make guarantor loans effective for credit score improvement, choose direct debit payments to avoid missed monthly instalments. After that, check your credit report regularly by approaching a credit reference agency.
24loanswales offers you a number of benefits. If you are looking for guarantor loans from a direct lender, you can consider us for the following reasons.
Guaranteed loans are a great option for those with limited or bad credit history. Apply today and receive funds on instant approval decision.
Representative Example
Loan of £4,000 repayable over 12 months at an interest rate of 45.3% pa (fixed). Monthly repayment of £420.66. Total amount payable £5,047.96
Warning: Late payment can cause you serious money problems. For help, go to: moneyadviceservice.org.uk
Yes, guarantor loans are the right choice. There is no match to the guarantor loan suitability in the UK especially if you have a poor credit rating or limited credit history. In both these situations, borrowing a larger amount can be difficult. Therefore, guarantor loans come to the rescue, providing the necessary funds for all your financial requirements.
The maximum guarantor loan amount in the UK is £50,000. You have to qualify for an amount based on your creditworthiness. However, due to support from a guarantor, you can take out a bigger loan.
Typically, the guarantor loans have an APR between 6% to 32%. However, the final APR that you get depends on several other factors, such as your repayment ability, employment stability, and recent financial behaviour. To get lower guarantor loan interest rates in the UK, you need to first work on your finances to improve your creditworthiness.
Varied types of fees can be included in the loan deal. Arrangement fee, late fee, and administration fee are the major types of guarantor loan fees in the UK. Hence, you should be prepared to pay off these basic expenses. This affects your total cost, and be ready to manage your budget accordingly.
You can’t deny the guarantor role in loan approval, as the funds through these loans can be availed only when you have a guarantor. Without that, the lender will not even accept the loan application. Having another person to guarantee your repayments is the primary requirement of these loans.
No, it is not possible to change a guarantor in the UK once you take the loan. It is possible only in rare cases, such as if the guarantor dies. Otherwise, the only time you have to reconsider is the 14-day cooling-off period. After that, it is technically not possible to change the person who guarantees your instalment payment.
Yes, guarantor loans for pensioners in the UK are for those with weaker financial situations. That is why the role of the third party, which is the guarantor, is important. As a pensioner, you have many benefits from these loans. Borrow a big amount at lower rates with the help of a guarantor.
A self-employed guarantor loan is available irrespective of any employment status. You need to prove your repayment ability and provide relevant proof that your earnings are stable. We even consider freelancers. Therefore, as long as you have a repay ability, the self-employed guarantor loan options in the UK are available for you.
Yes, the flexible guarantor loans are always available through customised deals. However, for that, you need to convince a lender of your strong ability to pay back the funds. Improved payment behaviour, satisfying the debt-to-income ratio, makes it possible to qualify for the repayment flexibility guarantor loans in the UK. Enjoy the pocket-friendly payment schedule.
At 24loanwales, we do not charge any penalty on the first missed payment. In fact, we are contacting you to reschedule a new repayment plan to avoid future missed payments on your guarantor loan. However, various lenders have their own lending policies.
If the guarantor stops paying in the UK after the default of the primary borrower, the lender needs to contact the guarantor only for the repayments. It brings the legal process into the picture, also the credit score of the guarantor gets affected. Also, it causes strain in the guarantor's relationship with the borrower.