In the loans with guarantor, your main concern is to find a person who is ready to take the responsibility of your repayments. Family, friends, a friend of friends, you are prepared to explore the whole world to find a person that can say ‘yes’ to you. But, is that all? Perhaps not. A guarantor too has to qualify some parameters. Then only one can become eligible to back a loan application.
This article describes the various aspects of a guarantor in guaranteed loans and tells what qualities you should look for, in a person whom you want to support your loan request.
Let us start with the basics. It is essential to know in in-depth detail because financial matters are fragile. If you make a mistake, your application may get rejected, and then the cost comes in the form of a demoralising degrade in credit ratings. No, you do not want it to happen, do you?
Who Is A Guarantor?
A guarantor is someone that takes the responsibility of your loan repayments. In case you fail to repay or pay off the loan amount, that person pays the due amount. It is more than a promise and is similar to a complete responsibility.
Requirements to Be a Guarantor
Several essential elements can be slightly different depending on the lender.
- The concerned person should be a resident of the UK
- The age should be between 21 years to 75 years
- Should have a good credit history and if not then not less than imperfect history
- Should have a UK bank account and also a debit card.
- A minimum income of £400 per month is necessary ( self-employed, employed or retired)
- Should be financially independent with own bank account
What Are The Other Conditions?
In addition to the conditions mentioned above, few other things come in the priority of the lenders. They find it necessary to be sure, on every aspect. Only when they are satisfied, the decision on guaranteed approval loans come.
Homeowners are better
Every lender prefers the guarantor that owns a home. However, with an increase in the competition between the loan companies, the non-homeowners are also accepted. But, having a home is still more promising.
The loan company needs to know, that in case the borrower fails to pay a monthly instalment, can the guarantor pay the instalment or not? During the loan process, the guarantor needs to prove the financial efficiency and also affordability to pay the monthly repayment. Unlike the Loans without a guarantor, a borrower has to go through many examinations as an applicant. Also, he needs to prove the trustworthiness of his guarantor. It is like fighting on the double front and losing on any of the ones can bring the stressful, annoying result of rejection.
In the guaranteed funding option, the applicant and guarantor are like two sides of a coin. One cannot exist without the other. Keep the things mentioned above in your mind and make no mistake. Flawless borrowers make a bright financial future.
Note – British Lenders offers guaranteed loans on lower rates. A person should have some necessary qualities to qualify to be a guarantor, and the applicant should know about that and find a suitable guarantor accordingly.