Guarantor loans have become very popular among the people in the UK. These loans are particularly liked by those who have a bad credit history and are no longer able to apply for loans directly from banks and other financial institutions. A guarantor loan provides a person the opportunity to take out a loan even if he has a low credit score provided he can produce a guarantor that can guarantee repayment of the loan amount on behalf of the borrower. Although taking out LWG guarantor loans in the UK isn’t that difficult, keeping the following tips in mind when applying for such loans can help you in ensuring that you get the best possible deal.
Choose a Good Guarantor
It is of the utmost importance that you choose your guarantor wisely. Your chances of getting the guarantor loan depend almost entirely on your choice of guarantor. If the guarantor you select does not meet the necessary criteria or does not have a good credit history then your request for a guarantor loan will be denied. Therefore, it is crucial that you find a guarantor who is at least 21 years of age and has a healthy credit score as well. Moreover, it is also necessary that you inform the guarantor regarding the risks that he would be taking on by becoming your guarantor.
Apply for the Loan Directly
Various specialist guarantor loan companies have sprung up in the last couple of years in the UK. These companies are offering guarantor loans to people at considerably low interest rates than other unsecured loans like payday and fast cash loans. When applying for a guarantor loan from any of these companies make sure to not involve a broker. The reason for this is that these companies process the guarantor loans very quickly and there is no need for you to waste money on a broker to get your loan request approved.
Compare Quotes of Different Companies
Guarantor loans can be obtained from a number of specialist guarantor loan companies in the UK. So, you have plenty of options available to you. Each company has its own interest rate and maximum amount of guarantor loan. Some companies offer a good interest rate while others allow the borrowers to borrow a larger loan amount. Therefore, it is wise to shop around instead of choosing the first guarantor loan lender that you come across. Compare quotes of multiple guarantor loan companies before finalizing the one that is offering you the best deal in terms of guarantor loan amount and interest rate.
Understand the Consequences
When applying for a guarantor loan, it is necessary to understand the consequences that you will have to face if you fail to keep up with your loan repayments. Your failure to repay the loan is going to deteriorate your credit score even further, making it impossible for you to get another loan anytime soon. Moreover, defaulting on a guarantor loan will also make it extremely hard for you to find a guarantor the next time you want to take out a guarantor loan.