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The Best Way to Find Guarantor Loans for Poor Credit
The term ‘bad credit’ represents an individual’s credit record when it appears that the individual has a high credit risk. Having a high credit risk indicates to financial lenders that the individual has had trouble paying back a loan before, or have defaulted on payments.
There are many reasons why you may have a poor credit profile. You may have missed a few repayments on a loan, or you have missed a few bills. In some instances, you may even have had a CCJ or IVA filed against your name. Bankruptcy can also lead to a poor credit profile.
Sometimes, a bad credit score can be the result of not having yet built up a credit profile. Many young people discover that they have poor credit scores, simply because they have not yet had the chance to build up a good credit record.
If you’re unaware of your present credit score, there are enough ways to find out what it is. The best is to use a free online tool, such as Noddle, to find out what your credit score is. This provides you some understanding into whether you’ll fall into the ‘bad credit’ level.
Other credit profiling services also happen, like Experian. The advantage of using one of these services is they often have credit experts on hand to help you determine the risk factors in your credit history. This can help you possibly remove some of these risk factors, and thus increase your credit score.
Normally, it is almost inconceivable to obtain a conventional loan from a bank if you’ve got a poor credit history. However, there are lenders who specialize in advising people with bad credit have the finance that they need.
Bad credit guarantor loans
Guarantor loans for bad credit are an excellent way to borrow money if you’re experiencing from bad credit. When taking out a guarantor loan, someone is required to co-sign the loan with you. This person is referred to as a guarantor.
By co-signing the loan, the guarantor agrees that if the borrower becomes inadequate to repay the loan, the guarantor will repay it instead. This gives the lender some financial peace of mind, as they know that the loan will be repaid.
By carrying out a guarantor loan, this enables people suffering from poor or poor credit to get the finance that they need without having to resort to desperate methods.
Anyone can be your guarantor, as long as they have an excellent credit history. Typically, guarantors will be close family or friends. Guarantors are not commonly allowed to be spouses, even though there are some exceptions.
Guarantors need to have a great credit record so that the lender knows they can count on the guarantor. The lender needs to be convinced that if the borrower is inefficient to pay, the guarantor will provide for their financial repayments.
Using this process, the borrower can obtain the finance they need but also, repair their credit history at the same time. By paying their repayments on time, they can help to their credit score and make it better. This then allows the borrower to have a larger choice of finance options accessible to them, later in life.
Where can I find a guarantor loan for poor credit?
Often, the most suitable approach to getting a guarantor loan if you’re suffering from poor credit is to go to a legitimate broker or to go straight to a lender.
By going to a broker, you’ll be able to obtain information about the whole market. Brokers have a very good knowledge of the marketplace and should be able to suggest you on the best course of action for your situation.
If you’ve got bad credit, brokers will be able to tell you what particular guarantor loans will suit you. Many lenders will reject you if you’re suffering from poor credit, and each rejection can leave a mark on your record.
By going to a broker, they can occasionally tell you which lenders are likely to accept you before you apply. That way, you can keep the denials to the absolute margin. Ideally, you’ll be accepted on your first application.
Things to keep in mind
When you’re looking for a guarantor loan with poor credit, there are a few points that you should keep in mind. If you are not paying attention, you could end up in a worse financial situation than you were when you began.
Guarantor loans can be secured or unsecured. If it is a secured loan, the lender has ‘secured’ the loan against your home or another important asset, e.g. a car. A secured loan can mean that you will pay a lower rate of interest. However, if you do not keep up the repayments, you could lose your home.
If you opt for an unsecured loan, then the lender has no claim to your property. Therefore, even if you default on your payments, the lender will not be able to reclaim your house to get their cash back.
What if I can’t keep up my repayments?
If you can’t keep up with your repayments you must contact your moneylender immediately and advise your struggling with the monthly installments some companies will adjust your monthly installments to reflect what you can afford to pay back on a monthly basis please note that this can also extend your term of the agreement and probably the amount of interest that you end up paying back. You’re never advised to just stop paying your agreement as this may result in interest being charged on the agreement and missed payments showing on your file this could make obtaining further down the line a lot more difficult.
What do i do next?
Next is the fun bit you need to click on the apply button and fill out our simple online form designed to make sure the whole application as smooth and pain free as possible. The whole application process from start to finished shouldnt take you longer that 3 minutes its as simple as you can get.
*Subject to lender approval and requirements.