There’s a lot of money in guarantor loans – that’s for certain. The biggest guarantor loan provider in the UK recently floated on the stock market and their bosses are expected to receive a windfall of £327m between them, according to Sky News. Many people with bad credit genuinely believe that the only way they can get access to emergency cash when they need it is by presenting a lender with a guarantor. But that couldn’t be further from the truth.
Here at Loan Broker, we don’t offer guarantor loans. All of our loans are no guarantor. Why is that? We think that guarantor loans are really bad value for money and, in the event that a borrower can not pay their loan off, we think a guarantor loan can do serious damage not only to their financial situation but to their relationships with their loved ones.
In this article, the Loan Broker team share with you:
- what does a guarantor do?
- aren’t guarantor loans controversial?
- should you have a guarantor?
- is it possible to apply for a loan without a guarantor?
- a no guarantor payday loan
- a no guarantor short term loan
- protections you benefit from with a no guarantor loan
- how your home is safer with a no guarantor loan
- how to apply for a no guarantor loan
What does a guarantor do?
With a guarantor loan, there are, essentially, two people whose names go onto the loan agreement. There’s the borrower and then there’s the guarantor.
When the loan is approved and the paperwork is signed, the guarantor loan company transfers the money to the borrower’s account. The guarantor loan company then collects their repayments monthly from the borrower’s bank account.
So far, so normal. What’s different is what happens if a borrower can’t pay the loan back. The guarantor loan company then contacts the guarantor and asks them to make the repayments on the loan themselves. So that guarantor has never had any money themselves from the lender – they’ve not had any benefit from the loan but they’re now expected to pay it back.
It’s bad for the guarantor who has to find this money every month to pay back a loan they didn’t take out. It’s particularly bad for the guarantor if they can’t make the repayments because, just like the borrower, they will be taken to court and they will be given a County Court Judgement.
Perhaps the most important thing people risk with a guarantor loan is the relationship and the history between the borrower and the guarantor. It takes a lot to find someone who has so much love and respect for you that they will guarantee a loan for you. Of all the things you could ask someone to do, this is one of the biggest.
Should I have a guarantor?
If you can’t keep up repayments on a loan someone else has guaranteed for you, you’re putting that relationship at risk. That person may never trust you again. That’s a big price to pay – we think it’s too big a price to pay here at Loan Broker.
Can I apply for a loan without a guarantor?
Yes. The number of guarantor loans taken out by people in the UK is very small. In fact, the vast majority of loans agreed to by lenders don’t have a guarantor and the lenders never ask their borrowers for a guarantor.
You can get no guarantor loans if you have a great credit rating or a poor credit rating. If you have a poor credit rating, there are less options open to you than if you have a great credit rating. If that’s you, you might want to think about taking out a no guarantor short-term loan, but what are they?
No Guarantor Short-term loans
With a no-guarantor short-term loan, you can borrow up to £2,000 over a 12-month period. No guarantor short terms loans are usually taken out to cover financial emergencies like unexpected medical bills, car repairs, boiler repairs, and so on.
No guarantor short term loans are an expensive form of credit however they can be taken out very quickly and, if you come into money later on, you can, in most cases, pay the loan back in full in one big lump sum and not face any early repayment charges.
You can apply online via Loan Broker for a no guarantor short term loan. You will receive a decision, in most cases, within seconds from dozens of lenders. We will then show you the very best rate we’ve found for you and it’s then your choice whether you want to proceed from there.
How am I protected on a no guarantor loan?
Loan Broker is a Financial Conduct Authority-approved credit broker and all of the finance companies on our lending panel are Financial Conduct Authority-approved as well.
That offers you, as the borrower, extra protection. You benefit from the following guarantees as a no guarantor short-term loan customer with Loan Broker:
- You’ll pay no more than 80p per day in interest (that’s a daily rate of 0.8%)
- If you miss a repayment, you will not be charged any more than £15 (in fact, many of our lenders do not make a charge for this at all)
- When added together, the interest and penalties you pay will not come to more than the value of the loan you took out in the first place.
Please remember that borrowers taking out a guarantor loan don’t have these legal protections.
Will I lose my home if I can’t keep up the repayments?
No. The no guarantor loans we help borrowers with are unsecured.
How do I apply for a no guarantor loan?
It’s easy. You start with our application form – just click here.
Fill in your details – please remember to double-check everything you tell us because mistakes on borrowers’ application forms are the number one reasons why applications get held up.
Within seconds, we’ll contact all the lenders most likely to want to lend you and once we have their offers back, we’ll show you the very best rate we’ve found.
There’s no obligation to take out any loan we find for you. We don’t charge you a fee and you don’t have to rope in a friend or loved one to vouch for you as a guarantor.