Guarantor Loans for people with Bad credit
There are loans especially made for people who have poor credit ratings. These people who have bad credit rating history are actually tagged as high risk customers, which is also the reason why most lending companies reject their application. Loans like guarantor loans are big help to these people because they do not need to have a good credit rating to be able to apply for a loan. Also, it only needs minimal requirements so it will be easy for them to apply and get approved within just a short period of time.
Guarantor loans need a third person to be able to apply for it. This third person shall be the guarantor, who will be the key person to help you get a loan. This guarantor will be the one to ensure that you can afford the repayments in your loan term. Because in case that you fail to do so, then the guarantor will be the one who shall pay for your loan. That will not only damage your credit rating once again but also, it will be your guarantor at risk.
Of course you would not want that to happen especially that you are only seeking their help without them having a benefit or anything. Also, with getting a guarantor, this means that this kind of loan is an unsecured loan. It is unsecured because it does not have a needed collateral where in you can secure the loan against. It totally depends whether you can afford to pay the repayments or not. So to avoid putting the burden to the guarantor by not paying your repayments successfully and on time, it is required for you to have a proof of income to show that you can pay the loan you wanted.
The guarantor can actually be anyone you know. This can be a member of the family, or a colleague. Just as long as this guarantor can pass all the needed requirements and is at the right age, then he or she could be a guarantor for you. There are requirements which will be similar for you and the guarantor to be so you need to pass those requirements for your loan to be approved. Another thing you should note is that the guarantor must have a good credit rating. This is one of the primary requirements so that in case you fail to make the repayments on your own, then this guarantor is guaranteed to pay for your failure to do so.
However, there are also other loans which may be available for you if in case you think that this kind of loan is right for you. There are lots of advantages when it comes to getting a guarantor loan especially that most people consider this loan better than other loans which need a good credit rating. Some of these advantages include flexible loan term, which is indeed helpful when you want to start slowly but surely when it comes to paying the loan.