Complete the Oink Money application form and let us compare the best guarantor loans available to you. We are a licensed credit broker and not a lender.
Personal guarantor loans allow you to use someone else’s capital, assets or personal finances as a guarantee for your loan. Guarantor loans mean that you can get a personal unsecured loan even if you haven’t got that much money in the bank, or your credit history isn’t that great. If you’ve been refused by mainstream lenders, this type of borrowing could be the perfect answer for you.
Guarantor loans are great for people with a bad credit history, and they have become increasingly popular over the last few years. Guaranteed loans are also popular amongst students and professionals who are early on in their careers, as they haven’t had time to build up personal capital or a personal credit history. The are relatively easy to secure because the money lender is guaranteed the loan repayment in full, no matter what. However, finding a good guarantor can take time as you need someone who is willing to take on the risk of the loan on your behalf.
These loans typically have lower interest rates than payday loans because they are designed to be paid back over a number of years, and they are lower risk for the lender.
The money you borrow can be used for a variety of reasons, from being able to secure your first flat to paying for your wedding. If you have a lower deposit amount and a bad credit history, asking someone to guarantee your loan can help convince banks and financial institutions that you are still a sound investment. Generally, it’s safer to be cautious and only take out small, manageable loan amounts at a time.
Often loan applications are completed online and are generally straightforward, but you will need to provide personal and bank details for both yourself and your guarantor. You will both need to provide details of your credit history, their bank statements, and address details. Sometimes to qualify as a borrower you will have to pass a credit check yourself, other times a credit check won’t be needed from you.
You can apply for a guarantor loan right here at Oink Money. We will search our panel of lenders for the best deal to suit your circumstances. If you proceed with your application after agreeing to the terms and conditions, you will then be asked for the personal information of the person guaranteeing your loan. Be aware that the money you borrow is sometimes passed directly to the guarantor, who must then pass it on to you.
A guarantor will be the first port of call if you default on any of your loan repayments, so they need to be someone who has good personal finances and can secure the entire loan amount (including repayments). People who are homeowners are generally preferred as guarantors, but some loan providers also accept tenants. Generally, guarantors need to be in work and in receipt of steady income, or have a lot of personal capital, as they need to prove that they can cover the amount of the borrowing. People often look to close friends and family, but anyone can step in as long as they understand the risks. You can’t ask your spouse to guarantee your loan as you are already financially intertwined.
Loans with a guarantor vary in size. It depends on the repayment schedule and the person's ability to guarantee the loan sum. Lending can start from a few hundred pounds up to £25,000, but most guarantor loans tend to be worth a few thousand pounds.
Your loans company will go straight to your guarantor and take the money from them to keep the loan repayments topped up. The person guaranteeing your loan will need to understand this before they commit. It’s always best to keep up with repayments so that your guarantor can stay out of the repayments.
They are a great way to safely borrow money, but as you are asking someone else to take on a risk for you, you have to be careful. As guarantor loans are often the only loan option for people with bad credit, you need to make sure that you aren’t asking someone to take on too much risk for you. Guaranteed loans often have lower interest rates than payday loans so they can help you save more money in the long run (as long as you make your repayments). If you manage your repayments well, you may even be able to use your guarantor loan to build up a good personal credit score– meaning you could eventually get a mainstream loan.
The best loans have lower interest rates (shown as an annual percentage rate – APR) and allow you to repay the loan back early if you can. Good APRs for guaranteed loans tend to hover around the 49.5% APR rate. The longer you take to pay a loan back, the higher the interest rate so try not to borrow too much or for too long. Some money-lenders like Amigo specialise exclusively in guarantor loans so it’s worth shopping around for the best loan deal. Why not let us do the shopping for you? Use Oink Money to apply for a guaranteed loan today.