Have you tried to get a loan but always get turned down because of bad credit? When many people’s loan applications are declined, they turn to options such as payday loans, pawnbrokers loans or doorstep lenders that have a very high interest. Better options to consider when in such a situation are guarantor loans. They are easily accessible and all you need is a guarantor.
What is a guarantor loan? This is a form of an unsecured loan that requires a co-signee who is ready to take responsibility for repaying the entire amount in case you default.
Guarantor loans come with numerous advantages
- Lower interest rates
Guarantor loans are like other commercial bank loans that have low-interest rates. For example, many payday loans and pawnbrokers loans have very high-interest rates with a great risk of getting out of control if you default. With a guarantor loan, you can enjoy interest rates of as low as 5%. Well, compare this with credit card loans that can hit a high of 10% and payday loans that go up to more than 20%. To get the loan, just talk to your close friend or colleague at work to be the loan guarantor. You can read through guarantor loan reviews to find the banks with lower rates.
- You have access to money even with bad credit
For people with bad credit, thoughts of getting loans remain distant mirages. Every bank will first check your credit and dismiss the application at the earliest possible instance. However, every bank will be willing to allow you get the cash if the guarantor has a high credit score. Though you are riding on the good credit score of your friend, the project you want to fund will not stall. However, you must be careful to ensure that the loan is repaid on time to avoid harming the credit rating of the guarantor and yours too.
- Access to larger amounts of credit
When it comes to guarantor loans, the amount you can access is not limited. Whether you want a lot of cash to refurbish your office, buy a new car, take a holiday, or buy furniture, there is no limitation. The focus should be taking only what you can repay comfortably and as fast as possible. Do not fall into the temptation of taking a lot of credit because it is available.
- Ease of access
Unlike other loans that require you to submit personal assets as collateral, guarantor loans are very easy to access. Once you make the application and the guarantor signs the loan, it will be just a few days before the credit is wired into your account. In fact, most of the time is spent checking the loan repayment history of the guarantor and his/her credit score.
Guarantor loans are some of the best options to access a lot of cash if your credit score is low and other options are not reliable. Once you have identified a guarantor, the bank no longer checks on your credit score. However, you should ensure to only borrow what you can repay easily and clear it as fast as possible to avoid hurting the credit score of the guarantor.