What is a guarantor loan?
Short term loan / pay day loan or guarantor loan; these types of loans are designed for people that have less than perfect credit scores. However in order to get a short term loan or payday loan there is still a necessary level of being able to manage your current credit finances well.
In circumstances where someone can’t evidence this on their credit file, they are likely to search google for terms such as “short term loan – no credit check” which isn’t always a good option, as they may be offered a loan they simply can’t afford to pay back. Companies that offer this type of loan are unlikely to be regulated by the FCA. They are also likely to search for bad credit loans or bad credit history loans.
Why use a guarantor loan?
So, instead there are lenders who will allow you to get funds via a guarantor loan. They use a friend or family member as the person responsible for the loan, with their permission of course, based on that friend or family members credit score. Here at Quid Market, we offer loans that don’t require a guarantor, we do look at your credit score but take many other things into consideration too.
How do you apply for a guarantor loan?
This works in pretty much the same way as when you apply for a loan from a direct lender or from a broker, you must supply your personal and bank details for both yourself and your guarantor. You can use a broker for guarantor loans, or go directly to direct lender by searching google for “direct lender – guarantor loans”.
Who makes a good guarantor?
This needs to be someone that has well to excellent financial history on their credit history. Usually a homeowner on a good income (employed) would best suit; some guarantor lenders do accept tenants too. Needs to be someone that understands the risk and understands that if you fail to repay they will be liable to keep up the repayments on your behalf. Your guarantor should be well aware of these ramifications before entering into the guarantor loan.