Things to Look Out For When Taking Guarantor Loans in the UK

Guarantor loans are a smart way of getting instant cash for people with a bad credit score. They provide you the chance to get a sizeable amount of loan at a considerably lower interest rate than payday loans. A guarantor loan can be taken from specialist guarantor loan companies that can easily be found on the internet. However, while taking guarantor loans in the UK from can prove to be a lifesaver for you if you have a poor credit history, there are some things that you need to consider before taking out a guarantor loan.

Who Is Offering the Best Deal?

The first thing that you will have to keep in mind when taking out a guarantor loan is to find out which company is offering you the best deal. There are quite a few specialist guarantor loan companies in the UK that are willing to offer a guarantor loan to people struggling with bad credit. However, the amount they are willing to loan out and the interest rate they charge varies from company to company. Therefore, it becomes extremely important for you to compare the different offerings of the guarantor loan companies and identify which of them is best suited for your needs.

Amount of the Guarantor Loan

The second factor that needs to be considered when it comes to guarantor loans is the amount that you would be borrowing. A guarantor loan allows you to take anywhere from £1,000 to £10,000. While you might find it more convenient to take out a larger sum of money as a guarantor loan, you might not be able to pay it back in a timely manner. On the other hand, it would be easier for you to repay a smaller amount of money borrowed as a guarantor loan. Therefore, it is best that you borrow only that amount which you need and don’t go for large sums unless you absolutely need it.

Credit Score of the Guarantor

The credit score of the guarantor is the third important thing that you would have to look out for when applying for a guarantor loan. The higher the credit score of the guarantor, the more amount of loan you would be able to borrow. Moreover, if your guarantor has a good credit history and is a UK homeowner as well then you can get the guarantor loan at a very low interest rate too. So, it is crucial that you find a guarantor who has a good credit score and also owns a home in the UK as well.

Who to Appoint as a Guarantor

The most crucial element of getting a guarantor loan is to find a guarantor who is willing to take up the responsibility of paying back the loan in case you default. While you can appoint anyone as your guarantor except your spouse, it is best to have your friends or family members as guarantors. These people are most likely to trust you and will be willing to help you out in your time of need.