Written by John Fisher - MinuteFinance
A guarantor loan is an old fashioned process of issuing loans based on trust between the lender and the borrower. It simply requires a person who can be trusted such as a friend, a family member, a colleague or a neighbour to guarantee it. The aim of a guarantor is to vouch that you will make payments and can also pay incase you fail to pay up. Guarantor loans in the UK have become a common practice nowadays as lenders are no longer depending on credit scores, credit history and employment details to issue a loan.
Features of a guarantor loan.
1. It Is Based On Trust
The lender does not request for any deposits or previous credit history to issue the loan and depends purely on a guarantor's word and mutual trust that you will pay the loan.
2. Fast Pay Outs
Guarantor loan in the UK mostly takes 48 hours to be approved if your lender has received your information but it can also take a few minutes.
3. Simple Requirements
For one to be eligible for this loan, they must attain the following:
1. Must be 18 years old
2. Must have a valid UK bank account
3. Must have a valid UK debit card
4. Must not have an existing bankruptcy order
4. No fees
There are no fees charged on guarantor loans in the UK while processing or after early or late payments as a means to attract borrowers.
5. Flexible Payment Plans
A lender ensures your loan repayment is affordable and can be paid through direct deposit, cash, online or through a debit card.
Before you take up a guarantor's loan, always consider the following:
1. Interest rates
2. Repayment periods
3. Your eligibility to qualify.
4. Eligibility of your guarantor
Guarantor loans are an easy and fast way to finance individuals. However, despite the minimum requirements, guarantor loans in the UK are expensive due to the interest charged.