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Guarantor Loans for Tenants and the Things you should know
Even though the financial condition in the United Kingdom is growing, this is simply not correct. While recovery has taken place since the economic crisis of 2008, the Brexit vote and with it, leaving the European Union in the near future, indicates that financially, even forecasters are unsure how matters will turn out.
But what does this imply to the man in the street? Where does it set out an already under strain public? Well, surely in our view, things are going to get far stronger before they get any better. And that means one thing only. People are going to use more and more credit products to get by as not many have disposable income or savings anymore.
We can see it across the country already. In fact, many loan products are being introduced more and more, including tenant guarantor loans. But what exactly is this type of loan? How does it work? How do you apply for one? Well, in this article we will be taking a closer look, learning the ins and outs of the guarantor loans for tenants.
What is it?
Simply put, a tenant guarantor loan is an unsecured credit product offered by a number of companies across the United Kingdom. It is particularly aimed at members of the public who have a poor credit history against their name or even in some cases, been declared bankrupt. Over the past number of years, these have become a very common way to lend money for this chosen group.
There are a few conditions, however. When applying for a tenant guarantor loan you will need a second party to co-sign the loan with you. This person is your guarantor and by signing the loan with you, they have agreed to pay the installments should you miss a payment. Of course, a lender is more than susceptible to give a loan in this case because the guarantor acts as a security buffer.
In most cases, a tenant guarantor loan is used in a time of emergency when an unexpected expense arises which an individual has no other way to pay off. By taking out a tenant guarantor loan, they can raise sufficient money to see off that expense, be it a sudden medical bill, a death in the family or something similar.
Lately, however, individuals who have bad credit ratings have come up with a clever use for these loans. Along with other similar bad credit loan types, for example, a logbook loan, people who pay their installments each month and eventually finish paying off a loan over its terms can help improve their credit score no end. By doing so, you can finally put yourself in a position where your credit score becomes positive and you will have other lending options from banks and other financial companies. You may also have access to things such as a mobile phone contract, something you would be turned down for if you had a poor credit rating.
A guarantor – who should I ask?
Well, individuals are worried to approach someone to ask them to co-sign on a loan, even if it is a close family member. At the end of the day, our advice is to find somebody you know will sign for you, has the financial resources to help if you default on a payment and who will agree to act as guarantor on your behalf. Your guarantor should also not suffer from a poor credit rating. If they do, the loan will not be approved. Finally, keep in mind that the person who agrees to sign as a guarantor must be younger than 65.
Advantage of this type of loan
A guarantor tenant loan has a number of benefits for the individual applying for one.
· As we have already pointed out, many people are in grave financial difficulty. When they need to apply for a loan for a considerable sum of money, their credit rating can be their downfall. With a guarantor tenant loan, even if you have a poor credit rating against your name, this will not affect your possibilities of securing a loan.
· A guarantor credit loan is far more ambitious in terms of a yearly percentage rate than a payday loan, another popular loan the public of the United Kingdom favor.
· Unlike a logbook loan that deals with your vehicle, motorbike, truck or caravan as a kind of collateral, a guarantor tenant loan requires no such thing. Bear in mind though, that should you default; the guarantor who signed the loan with you will have to make a payment for that month’s instalment. It is for this reason that we suggest a family member, as you are more likely to not default and make a family member pay in your stead.
· Once you have the person who will support as a guarantor for you, the real signing up method and administration to set up the loan is fast and painless. Many institutions that offer this type of loan promise to have it in bank accounts within a day.
· As stated briefly above, you can use a tenant guarantor loan in your favor to start up a bad credit history into a positive one or to even help create a credit history when just starting out in the working world.
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.