Should I get a guarantor loan?
A guide to guarantor loans
What’s a guarantor?
So first, what is a guarantor? A guarantor is a person who guarantees your repayments for a big financial commitment, such as a loan, or renting a flat. From a lender’s point of view, if a friend or family member trusts you to meet your repayments, then they should do too. The crucial thing to remember here, is that if you do fail to meet your repayments, your guarantor will be expected to do so. It’s therefore vital that you discuss this with your potential guarantor, before entering any agreement.
How much do guarantor loans cost?
Next, how much do guarantor loans cost? Well, if you have a poor credit history, you pose a higher risk to lenders than if your credit history is spotless - that’s just the facts. It therefore shouldn’t be a surprise that guarantor lenders will charge you slightly higher rates than those offered by the high street banks. However, this doesn’t mean there aren’t deals to be had, so before you apply, make sure to compare your options to ensure you get the best deal. Our guarantor loans table is a great place to start.
Should you get a guarantor loan?
What else is there to remember? Guarantor loans are for a very particular set of circumstances and if there’s any doubt as to whether you can afford the repayments, don’t apply. Apart from that, know where you stand, compare your options, and choose wisely.