Guarantor loans are a new form of loan, offering people with bad credit the possibility of borrowing money for most reasons. Many places have nothing but bad things to say about these guarantor loans, since not only do they usually have a twisted view of the current financial market, but they usually do not know all the features about how these loans work. We thought that a small article discrediting some of the key myths scattered over the Internet would help many potential borrowers to think on their own. So without further ado, we present the 5 best myths and facts about the guarantor loans discredited once and for all:
1. The Guarantor Must Hand Over There Bank Details
This is not true, while some lenders need the guarantor’s bank details; there is a couple as well who does not need this. In general, these are smaller companies that strive to establish a solid relationship with the borrower and try not to have to trust in the guarantor unless the contact with the borrower disappears.
2. The Interest Rates Offered Are Ridiculously High
Although there is some truth in this claim, it is significant to consider the alternatives. Unsecured lenders are few and far between when things turned around towards the end of 2017, most of the major lenders retreated, from Welcome Finance to much more recently the Lloyds TSB: Black Horse Finance lending arm. When the lender that has survived is daily loans, the quoted interest rate that is in the money supermarket is 35%. This is for people with a great toy fair credit history. The other lender is provident; they provide home loans for people with bad credit. This means that somebody comes to your door once a week/month to collect your payments. The indicated interest rate for provident is 272%. Click here.
3. The Loan Is Guaranteed Against the Property of the Guarantor
The guarantors are necessary to be owners; however, different secured loans absolutely nothing is guaranteed on the property. The reason why guarantors should be owners is that they are much more possible to make loan repayments to avoid affecting their mortgage rates. They usually have a proven financial history as well.
4. You Can Only Get a Small Loan
The amounts of the guarantor’s loans increase constantly. Now the maximum you can borrow is $ 6500. When a lender enhances the amount offered, most will follow suit. This is ideal for consumers and means that expectantly we will see amounts that exceed $ 6500 in the next year or so.
5. The Guarantor Loans Are in the Guarantor’s Credit File and Not in the Borrowers
The guarantor loans are in the borrower’s name, the loan will not appear in the guarantor’s credit file unless the loan fails. This means that it is a great way to fix a bad credit file and, confidently, in the future you can opt for a more convenient option through a bank. The guarantor does not have to worry about the loan, which prevents them from obtaining financing in their name is needed.
So there you have it, I hope this has been perceptive and helped a little when we decided to follow this route or not. As always, it is important to think carefully about obtaining a guarantor loan, especially if it involves a friend or close relative. For more details, visit: https://www.trusttwo.co.uk/borrowing-from-us/advantages-of-a-trusttwo-guarantor-loan