It is easy to worry that certain types of loans will not
give us the amount of money that we need. When we are looking to borrow money,
it is usually because we need to buy a specific item. This might be because we
have an emergency that we cannot pay for, perhaps an unexpected bill, need to
replace a broken white good or something like that. There are all sorts of
possibilities but if we need a lot of money then we might worry that we will
just not have enough for what we need. A guarantor loan is a relatively new
type of loan and this means that many people may not have an idea of what they
are like. It might be that they are worried that they might not be able to
borrow enough money. However, due to the way the loan works, it is likely that
you will be able to have enough.
How a guarantor loan works
So a guarantor loan is different to other loans in that you will be able to borrow a significant sum of money even if you have a poor credit record. This is something which we are probably not used to seeing and therefore may come as a surprise. However, there is a good reason as to why they are happy to lend more. This is because they will need a guarantor. The guarantor can be anyone that has a good credit record hat is prepared to cover any repayments that are missed by the borrower. This will be someone that they know well, usually a family member but sometimes a friend. The lender will check that the guarantor has a good credit record and if they do, they will lend the borrower the money that they want and be confident that it will be repaid, even if it means that the guarantor repays it. The loan is repaid in instalments to make it easier to manage the repayments. How long the loan lasts and how much is repaid will depend on how much is borrowed and the terms and conditions of the specific lender.
How much can you borrow?
The amount that you can borrow will depend on the lender that you choose to use. It is common to lend up to £10,000 but you may be able to borrow more or less depending on the lender that you choose. You will have to repay this over a series of years and the longer you take to repay, the more interest you will have to pay on the loan. You should be able to calculate how much the total cost of the loan will be so that you can decide whether they are right for you. If you are not sure how to do this then get in touch with the lender and they should be able to help you. If they cannot then it would be wise to contact a different lender as this is something which is basic to calculate and they should be able to do.
Will it be enough?
Whether this amount will be enough money will depend on how much you need. It is wise though, to make sure that you are borrowing the minimum amount. It can always be tempting to borrow more money than we need and therefore end up paying more than necessary in interest. Therefore, make sure that you take account of savings that you have and any other money you can use before you add up what you need to borrow. Also only borrow for the item that you need, try not to be tempted to borrow a bit extra. It can often be tempting to get some more, either just in case you need it or to treat yourself to something. As much as you might deserve a treat, you do not deserve to pay the additional interest you will have to pay if you borrow the extra money.
Therefore, unless you need to borrow tens of thousands, you
should find that there will be guarantor loans that will have the money that
you need. However, you will only be able to use them if you can find a suitable
guarantor and so this could be a condition that you may or may not be able to fulfil.
It will depend on whether you know anyone with a good credit record and enough
money to make the repayments who is also interested in helping you out. Do make
sure that you are aware of the cost of the loan so that you can decide whether
you really want it. It is equally important to make sure that you can afford
the repayments. Although you do have a guarantor to help out, you might want to
make sure that you can pay as they may not take kindly to having to help you
out with every single repayment.
There are lots of people who use guarantor loans but you may
wonder what the attraction is. We may have seen some adverts on the TV for
these loans but might not really know much about them and why they can be so
helpful. They do have features that are different to other loans types and it
is worth knowing what those are so that you can decide whether this type of
loan is the right one for you.
Quick to arrange
Sometimes it is necessary to find a loan in the United Kingdom which is really quick to organise. If you need money in a hurry then it can seem that some more traditional loans just take too long to sort out. It might take a long time for the lender to decide if you can have the loan then a delay until you get the money sent to you. With a guarantor loan this can all be sorted out really quickly. Some will even be open outside of office hours to make the process even smoother. So, if you need money in a hurry this type of loan can be a sensible possibility.
Do not need good credit record
Most traditional lenders will carefully check your credit report and only lend to you if they feel that they can trust you to repay the loan on time. They will look at past loans, contracts and bill payments and see whether you always repay them on time. This can be tricky then for anyone who has ever got behind in payments or who has not yet had a loan, has no contracts or regular bill payments to make. This will mean that they will not be offered a standard loan. Therefore, they will need to look for a loan where the credit record is not so important and therefore this type of loan could be a good option for them.
Can borrow significant amounts of money
With some loans it is only possible to borrow small amounts of money. This means that you might not be able to borrow what you need or you may need to try to borrow from several different places in order to get what you need. This can be tricky and may not even be possible. With a guarantor loan, you might be able to borrow as much money as you need with just one loan and therefore this could be a lot easier. You can usually borrow more with this type of loan than you can with any other loan available to those with a poor credit record and so hopefully you will be able to get the money that you need.
It is therefore worth thinking about your personal financial
situation and whether this type of loan might be advantageous to you. You will
need to decide whether you think that you need to borrow a large sum of money
or a smaller amount. It is always best to borrow as little as possible because
of the costs of borrowing, but you may still need a large amount of money in
order to buy what you need with the money. You also need to think about
repayment and check whether the loan of your choice has a system that you will
be able to manage well. You need to think about whether you will be able to
afford the repayments. Think about how many repayments you will need to make as
well and think about whether you will be able to manage them all. It might be
okay to make a few, but make sure that you are confident that you will be able
to make them all. If you are not confident and you decide to go for a guarantor
loan then your guarantor will need to pay instead. It is important to make sure
that they are aware of this and that they are happy to make those payments.
Also find out whether they will be happy to just make them or whether they will
expect you to repay them.
The fact that there is someone available to make repayments
for you is one big advantage of this type of loan. It means that you will not
have to worry if you cannot make the payment as the lender will get their
money. You will also be able to borrow a significant sum of money so if you
want to buy a car or something like that, you will be able to get the money
that you need. You will also be able to get the money pretty quickly, which
could be particularly useful if you need to buy something in a hurry. It might
be that you need a new car or else you cannot go to work or something like that
and this loan will be the perfect solution for you.