What are guarantor loans and what are the benefits of guarantor loans?
A guarantor is a person who allows you to use his or her assets as your security when borrowing a loan. The lender seizes your guarantor assets if you do not pay back the loan. Different lenders have different rules on who can be your guarantor. Some restrict it to immediate family members while in others; the guarantor can be even your friend. When you are very desperate for a loan, guarantor loans can be your saviour and help you get a loan.
A guarantor loan is a loan that is unsecured and requires a guarantor to sign the agreement.
This is a great advantage of guarantor loans. These loans are very flexible in terms of borrowing and repayment. You can borrow any amount you want based on your guarantor’s assets. The repayment is also very flexible as you can pay back the loan as soon as possible or after a long period of even five years or more.
When borrowing some loans, you have to go through many processes and sign a lot more documents. Taking a guarantor loan is the best option to avoid long processes. All you need is a guarantor to sign the credit agreement. The loan is processed within twenty-four hours and the amount deposited in your account.
Easy to access.
Too many people especially those under twenty-five years and those with poor credit history, it may be very hard to access a loan. Guarantor loans assist such people who are in need of loans and cannot get them. All you have to do is find a person above twenty-five years with a good history in credits to be your security. Therefore, these loans can be easily accessed by anyone. Read more.
The repayment period for guarantor loan is usually very long with some going up to seven years, unlike payday loans which mostly require you to pay within a month. You decide on how much you will be repaying after a certain period of time like monthly. However, the amount also depends on the amount of loan.
Borrowing higher amounts.
Borrowers are allowed to borrow high amounts, unlike other loans which have a limit. When the guarantor owns more property, the higher the amount you can loan. This is because the lender is assured of security from the guarantor.
No issue with poor, weak or no credit.
With guarantor loans, it does not matter if you are poor or have credit. Everyone can be approved to get a loan as long as you have a guarantor.
Lower default rates.
Due to the longer terms of repayment, the rate at which borrowers default payment is reduced since they have a longer time to look for the money.
Guarantor loans are mostly used by people who have previously defaulted payment of loans and they cannot be allowed to borrow. This is to ensure they pay on time since the trust was already broken. To find out more, check out https://www.trusttwo.co.uk/being-a-guarantor/