Dealing with a financial emergency can be a challenge for anyone, especially when it comes to dealing with an emergency with a poor credit score. However, with several options out there to choose from including that of guarantor loans, even those with bad credit can get access to the funds that they need from an FCA approved lender. Here at Fast Loan UK, we pride ourselves on providing a unique way of lending that factors in affordability when applying for loans. Whilst we do not provide guarantor loans ourselves, we have many no guarantor loans on offer for those that require that financial aid in a financial emergency.
What Is A Guarantor Loan?
A guarantor loan is a type of loan that is specifically catered to those with a poor credit score. They are commonly taken on by those who would be unable to gain access to additional funds conventionally due to their poor credit, and therefore require an additional level of security in the form of a guarantor co-signing the agreement. It is the responsibility of this guarantor to pay back the debt if the person taking out the loan is unable to as a result of illness or lack of income.
Guarantor loans are often used as an alternative for those that would struggle to be approved for a regular loan due to a poor credit score or extremely limited credit history. A guarantor loan can be used for a wide range of payments and can also be applied for online, much the same as several other leading loan types.
What Is A Guarantor?
A guarantor is typically a close friend or family member who co-signs the loan with you at the time of application. Within their role as your guarantor, they are responsible for paying back the repayment or the rent if you are unable to do so due to financial difficulty. Due to the nature of the loan and the terms as a guarantor, the chosen individual must be financially stable themselves with a good credit score to take on the responsibility of these payments.
When signing on as someone’s guarantor, the lender will conduct a credit check on both you as the guarantor but also the individual looking to take out the loan. This is to ensure that the guarantor is financially stable enough to pay back the loan should the borrower be unable to, adding a level of security for the lender.
Who Can Become A Guarantor?
Though anyone can be a guarantor, there are several criteria that a lender may require you to meet to be considered. Typically, the ideal candidate for a guarantor is a friend or family member that is financially stable and has a separate bank account from the borrower. Several of the leading lenders also have their own individual criteria for those looking to be a guarantor which often requires the applicant to be over 21 years old with a good credit history. By checking these criteria before you apply, you can make sure that your chosen guarantor is one that will see your application being approved the first time of asking.
Eligibility For Guarantor Loans
Should you decide upon a short-term loan or a guarantor loan from one of these lenders, you will need to ensure that you are eligible following their criteria. To help you understand the eligibility of these loan types, we have created a list of eligibility information for those looking to apply:
In Order To Apply For The Loan
• You must be 18 or over.
• There must be the holder of a UK bank account.
• You must be able to prove to the lender that you can afford these repayments.
Eligibility Criteria For Those Looking To Be A Guarantor
• You must be 21 or over.
• You must also have a UK bank account.
• Have a good credit score and be financially stable.
In addition to the above, you may also be required to provide additional ID to your chosen guarantor loans UK service as this will enable them to process your application and get the funds to you as soon as possible.
How Can The Team At Fast Loans Help You?
Here at Fast Loans, we pride ourselves on providing a totally unique way of giving our customers the emergency funds that they need. Though we do not provide guarantor loans as a service, we do provide alternatives such as short-term loans that can provide the emergency funds that you need should you find yourself in financial difficulty. When you have been approved for the loan, you can cover your emergency repairs or unexpected bills, and begin paying back the loan with monthly instalments to limit the effects this could have on your credit score.
Should you be unsure of these loan types and want to find out more, get in touch with us. Our experienced team are more than happy to help you with our no guarantor loans alternatives.
Guarantor Loans FAQ’s
Can You Apply For Multiple Guarantor Loans?
Should you find yourself in a financial emergency, it may seem tempting to invest in several loans to cover the cost, however, this should be avoided. With multiple guarantor loans being taken out at once, you are running the risk of defaulting on payments and negatively impacting your credit score. Should you need a larger loan amount to cover the full cost of your emergency, you should instead consider a loan type that can accommodate the amount that you are looking to borrow or using another guarantor loans UK service.
Can A Guarantor Loan Be Written Off?
Unfortunately not, a guarantor loan cannot be written off unless you have filed for bankruptcy. However, for those that feel they have been misled or wrongfully approved as someone’s guarantor, the Financial Conduct Authority (FCA) can step in to get some of your money refunded. This could be as much as the interest and charges that you have paid plus 8% simple interest as well as the removal of the information from the credit score should you have paid the loan back in full.
For those that still have an outstanding balance on a guarantor loan, The FCA could help you with the following:
• All interests and charges added to your account removed.
• Deduct any payments already made
• If you have paid too much, the extra should be refunded with the 8% simple interest added on top.
Can You Stop being Someone’s Guarantor?
Should you find that you are no longer able to be a guarantor due to your own financial difficulties, it can be difficult to remove yourself from this situation. However, you can be removed as a guarantor before the loan has been paid out, during the 14-day cooling period or should you find a suitable replacement. However, this is a change in the agreement that will need to be discussed with the guarantor loans UK lender that you signed the agreement with.