When someone struggles to pay their monthly repayments whether it’s a training course fees, any past repayment of a new car loan or the EMI of a new home or it can be any emergency then guarantor loan might be helpful. It is an unsecured loan which can be a good solution for the emergency needs. The users are mostly the young people who may not be able to repay their loan themselves due to low credit score or they never availed any credit in the past or might be rejected by mainstream lenders. Though, they need someone responsible to secure their loans. In UK, there are some guarantor loan companies that offer short term loans at low interest rates that fit the user’s affordability. These companies provide loan on the username with suitable guarantor. Everyday Loans can help even if you’ve had bad credit score.
Who can be your guarantor?
The guarantor is a person on whom borrower can trust fully. It can be anyone but can’t be your spouse. The eligibility for a guarantor is that their age should be more than 21 years, who is having a good credit score. They can be a family member, a friend, a colleague, a tenant, and can be a landlord. Besides this, the user and the guarantor both need to be a resident of UK. The guarantor’s name that is suggested by the user should become a helping hand for the user if ever he is in need. These loans can be used for various purposes but cannot use for any illegal activities like gambling, smuggling etc.
Procedure of the application
For getting the loan, the borrower needs to apply online. He has to fill the application form in his own name and register the guarantor’s name. This makes the process simpler and quick. Before the final approval of the proposal, the guarantor’s company checks the user and guarantor details and their eligibility; which does not affect the guarantor’s credit score of their mainstream lenders because the loan is registered in the name of the borrower who may not have any credit history. Once approved, the borrower can start their loan repayment within 30 days. Guarantor Company transfers the whole amount in the guarantor’s bank account and then he can give the money to the user if he is unable to pay any amount.
Settlement of dues
To settle all the dues the borrower asks the company to calculate all the figures, and in case if he had missed any repayment or he is unable to manage his money, the company advices him to take help from the independent organizations. If then also borrower is not in the position of making any payment then his account will be declared default and the guarantor will be asked to make the repayments and the case gets transfer to the debt collection agency or court might get involved and take action. So, the person who is becoming a guarantor needs to know his responsibility and be clear about the fact that he might be at risk if the borrower runs away with the money.