Guarantor Loans Advertised On Internet, TV and Radio
You may have noticed an increase in guarantor loans being advertised on the Internet, TV and Radio. These are loans for those people that would otherwise be declined a loan, the reasons for decline are usually as a result of a bad credit rating, caused by a non-existent credit history or a bad credit history, whereby debts were not repaid on time in the past. As there are many potential borrowers in this situation, some loan lenders have started monopolising on this market and providing guarantor loans.
In order to apply for a guarantor loan, you need a family member or close friend to act as guarantor on your behalf. A guarantor needs to demonstrate and prove their ability to make the loan repayments on your behalf if you fail to repay, therefore they will be subject to a credit check during the application to ensure that they fit the lenders criteria in terms of status and income.
In short a guarantor loan ensures that the lender can retrieve the loan amount, should the main applicant fail to repay. As with any sort of finance, the applicant must ensure that they can afford the repayments prior to applying for the loan, and if circumstances change and effect the applicants ability to repay the loan, the applicant should take steps to ensure that the lender is notified at the earliest opportunity. None payment of debts on any finance including guarantor loans can have a serious affect on your credit rating.
If you fail to repay your guarantor loan, your guarantor will be chased for payments. Therefore please think carefully before applying for a guarantor loan, and ensure that your guarantor understands the consequences of none payment of a guarantor loan.