Borrow between £1,000 and £25,000 today, for any purpose with an unsecured loan from Now Loans. Search our database of Guarantor Loans Lenders now, have your loan approved in minutes and you could have your loan funds you need paid to your account same day. It’s as easy as 1, 2, 3.

 

Applying for a Guarantor Loan is a good way to access unsecured borrowing if you have a less than perfect credit score. It takes the stress out of applying for a loan when you have poor credit. Your loan application and approved credit agreement is co-signed by a guarantor with a good credit report. A guarantor is usually a second party like a friend, close relation or trusted colleague. When they co-sign your loan, they’re entering into a legally binding credit agreement and take responsibility for repaying your outstanding loan balance if you are unable to.

 

Guarantor Loan benefits

 

Many borrowers with bad credit find that a Guarantor Loan is a cheaper and more accessible way to borrow than other high-cost debt options. Guarantor Loans can offer better benefits than other types of loans on the market for people with adverse credit. Here are just a few of them

  • Work towards Improving your credit rating

When you take out a Guarantor Loan and meet the monthly repayments under the terms of the credit agreement, it can have a long term positive impact on your credit rating. While all credit reference agencies have different criteria for scoring borrowers, a series of on time repayments will start to boost you

  • Higher chance of approval if you have limited credit history

People who have never borrowed before can often find it difficult to be approved for an unsecured loan. Without a proven repayment history, many mainstream lenders will be reluctant to approve funds. However, taking a loan with one of Now Loans Guarantor Lenders can begin to build a credit profile, while borrowing at an affordable APR. This makes being lending more accessible in the future.

  • Added security for Guarantor Loan lenders

It’s important unsecured loan providers that their loans a repaid. The reason why interest rates are higher for people with bad credit, is because there’s a bigger risk of the loan not being repaid. However, when you apply for a loan with a loan guarantor, it means lenders feel more secure that their loans will be repaid in full. This means you can access a better interest rate and your loan will cost you less money across the term of the loan than it would if you were charged a higher interest rate.

What criteria are Guarantor Loan lenders looking for?

 

When you want a friend or family member to co-sign our loan application, you should be aware of the criteria that Guarantor Loan lenders are looking for. It does vary between different lenders but there are a few common themes.

 

A guarantor is typically a very good friend, close relation or colleague. Someone you trust to discuss your personal financial circumstances with. However, they also need to be financially independent of you. So a business partner, joint bank account holder or someone who shares an address with you will be unable to co-sign your loan. But a long-term partner, son or daughter who don’t live at your home address could.

 

A checklist for potential loan guarantors

 

Here are a few of the criteria that Guarantor Loan lenders look for. Co-signing applicants should be:

  • A good friend or trusted family member
  • Independent from you financially
  • In good credit standing
  • Between the ages of 21 and 75
  • A UK based resident
  • Hold a bank account
  • Have a UK banking debit card

 

How to repair your credit rating?

 

Every time you carry out a financial transaction, from a mail-order purchase to your utilities bills, you leave a digital footprint that is recorded on your credit file. When you apply for any type of credit, lenders search your credit file to make sure the loan you’re applying for is affordable to you and that you have a record of repaying your debts on time. To improve your credit score, have a look at your individual credit report via a Credit Reference Agency. The most well known are Equifax or Clearscore. Once you see the issues impacting your credit rating, you can repair incorrect information, take steps to improve repayments and access borrowing easier in the future.

 

Guarantor loan lender top tips

 

  • Maintaining regular repayments will help you improve your credit score.
  • If your lender allows, consider paying off your loan earlier to save money on the total cost of borrowing
  • Use soft credit searches to search on loan comparison sites to ensure hard searches don’t impact your credit worthiness.