A guarantor loan is a personal loan specifically made as an inexpensive loan for those who have an unhealthy credit history.
The specific demand of a guarantor loan is the debtor is required to find a friend or relative who'll ensure the loan on their behalf, so in the event the borrower defaults on the loan, their guarantor will make the repayments for them, thereby safeguarding the lenders interests.
The tenant loans doesn't have to be a homeowner, but if they are commonly the costs of the loan will probably be lower. The guarantor does though should have a credit rating that is clean, and this is a vital element of being approved for such a loan.
There certainly are a wide selection of guarantor loans available, from small-scale loans from GBP50 to much bigger loans as high as GBP10,000 (notice the loans are becoming bigger all the time, and this was right at the time).
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The personal loans can also now be got reasonably fast, with the loans that were smaller (generally up to GBP750) accessible in as promptly as one hour, and the bigger loans (up to GBP10,000) as promptly as 24 hours.
And so the borrower is likely to be credit checked, just to make sure this really isn't the case. Apart from this, the lenders aren't concerned about a borrower's credit history, chiefly because the loans is backed by their guarantor who has a credit file that was clean.
There is a guarantor loan the best option for those that have a poor credit score, for the alternatives for borrowing are generally limited to:
-High-Priced payday loans with charges and fees up the expense of a guarantor loan
-Borrowing from family, though this can be hard matter to ask, plus individuals might not actually possess the sum to lend or friends
-Loan sharks - unfortunately over the last five years there is a sharp rise in illegal lending practices as folks have fought to borrow money from the more traditional sources, like the high street banks.
Therefore, if you've got a bad credit history and need loan, plus have a friend or family member who trusts you to meet with all your monthly repayments a guarantor loan can be an excellent option.