If you want to buy a new car but don’t have good credit, a guarantor loan can be very helpful. Thousands of people apply for guarantor loans each month, many of whom want to finance a vehicle. It is important to understand how guarantor loans work before applying. These loans can work for just about everyone. A guarantor loan is an especially good option if you have been rejected by a bank in the past.
How it Works
The first step in obtaining a guarantor loan is finding someone who acts as the guarantor. This person will sign onto your loan, essentially taking responsibility for paying it back if you cannot. Most lenders are willing to give out loans to people with bad credit if they have a guarantor.
The person who acts as the guarantor must have good credit, a stable job history, and adequate income. You will need to spend some time looking for the right person, because the standards for a guarantor are fairly high. Guarantor loans are very similar to personal loans in that you can choose how to spend the funds you receive. If you happen to need a new car, this is an option that’s worth looking into.
Requirements for Guarantors
There will be certain requirements that all lenders have for guarantors that you should know about.
The guarantor must:
• Be over the age of 18 with identification.
• Solid credit score/history.
• Stable employment history with details from past and current employers.
• Active checking account at a bank or credit union.
• No current loans.
• Adequate income (proof of income will be requested).
Who Benefits from Guarantor Loans for Car Financing?
You will quickly discover that many people can benefit from a guarantor loan, including those with bad credit. If you have a low credit score, a guarantor loan can help you get approved. It can be very challenging to get a bank loan for a car if you don’t have an excellent credit rating. As long as you have an eligible guarantor, your chances of getting approved are very good.
Those who need a loan quickly will also want to look into this option. Guarantor loan funds are typically dispersed faster than usual, so you can get the money you need when you need it. If you cannot get a car loan on your loan, this is the best option you have.
Getting Your Loan Online
Guarantor loans can be obtained online, making the whole process very quick and convenient. You can apply for one of these loans directly on the lender’s website. Filling out the application doesn’t take very long, which means that you can get the money you need faster.
It is important that you are truthful with all of the information you submit in your guarantor loan application. The lender will do their own research into your personal and financial details, so they will know if you are lying about anything. An increasing number of people in the UK have been turning to online loans because they are so easy and convenient.
Receiving Your Funds
Most people who take out a guarantor loan get their funds within 24 hours of filling out an application, but only if they are approved. Your funds will be electronically wired into the bank account that you specified in your application. This means that you don’t have to deal with any annoying paper checks or waiting in line to cash it.
What to Consider Before Getting Your Loan
There are a few key things to consider before getting your guarantor loan. You must first know exactly how much you need. The last thing you want to do is apply for more money than you need, because you’ll just end up spending more. You also need to make sure you can afford the loan. Those who take out loans before closely examining their finances often have trouble paying them back on time.
It’s also important to think about who you are going to get to be your guarantor. This should be someone that you trust completely. This person will be responsible for taking over your loan payments if you cannot for whatever reason.
Finding a Lender
The guarantor lender that you choose will affect a lot of things, including how much you pay for your loan overall. Take some time to compare loans from different lenders so you get a low interest rate. The higher your rate is, the more difficult it will be to pay back the loan by the due date. It is also crucial that you look for a lender that has a solid reputation. You don’t want to end up borrowing from a lender that charges you all kinds of hidden fees.
Guarantor Loans vs. Bank Loans
Some people mistakenly believe that bank loans are always preferable for those who need to buy a car. The fact is that guarantor loans can be a good option even for people who can get approved for a loan by a bank. The interest rates with guarantor loans tend to be far lower than with banks. You should keep in mind that getting a guarantor loan is just as safe as going through a bank, if not more so. These are just a couple of the reasons why guarantor loans are exploding in popularity in the UK.
Should I Use a Guarantor Loan to Finance a New Car?
If you are in a financially stable enough place to finance a new car, you should think about getting a guarantor loan. These loans come with many benefits that you can’t get with a bank loan, such as more flexibility and lower fees. It can be a bit tricky to find the right person to act as your guarantor, but it’s well worth the effort. These days a lot of people are choosing this option when financing new vehicles, and for many good reasons.