Everybody would like to obtain the best personal loan at an affordable rate. However, cheap loans are not a one size fits all. Comparing the upfront cost of loan, loans almost compete exclusively on the price alone and therefore the best are the low APR loans.
A guarantor loan is a loan unsecured where a second person becomes responsible in repaying the debt in case a person who has taken out the loan fails to make repayments. For those with poor credit or minimal credit history, this loan is a good option for those struggling in getting accepted for certain loan products. It is worth remembering that you can end up paying much more than the amount that was initially borrowed amount due to interest on top of monthly repayments.
Availability of Guarantor Loans and Interest
A low APR loan is dependent on the borrowed amount, term period and the lender. Choices of guarantor loans are limited. They can be seen along other options such as secured, car loans or peer to peer loans. On these products, the representative APRs are relatively high and range between 14.2 % and 62 %. Certainly, one will be looking at a higher rate of interest than a good credit product. You will be able to borrow a lot more as compared with a good credit product due to the guarantor element.
Criteria of the Guarantor Loan
For the Loan Applicants
In order to take out a guarantor loan, one needs to be a holder of a UK bank account and be at least 18 years old. You will also need to demonstrate to the lender that you are able to afford to make loan repayments by proving that you have a salary that comes through the bank regularly.
One needs to be over 21 years old and with a good credit history in order to be a guarantor of someone’s loan. You also need to be a homeowner in the UK so as to qualify for a larger sum of money. Nevertheless, be aware that some loans can be secured against property and in case you default in payment, the risk of having the guarantor’s property being repossessed is quite high.
Logbook loans are a form of raising finances in the short term where the borrower hands over to a lender the V5 log book of their vehicle in exchange for the loan. Such finances may also be taken using a van, motorbike or another vehicle as security. The loan ordinarily comes in form of a cheque although some lenders offer cash that is available immediately. The borrower is still able to use the vehicle, and in case they are unable to repay off the loan, the lender seizes the car. Moreover, if the proceeds from the sale of the vehicle fail to cover the amount of the full balance owing, you will be liable in making good the shortfall and this may also require a court in enforcing this.
Credit Rating and Guarantor Loans
In case, the repayments are timely made and paid off within the term period, this could improve poor credit rating or build on one that is non-existence.