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This week, we’re giving you the skinny on guarantor loans with 5 quick facts about guarantor loans that tell you (almost) everything you need to know about this unique method of borrowing money.
If you’ve never heard of guarantor loans before, or you’re just entertaining the idea of applying for a guarantor loan, this is the article for you.
There’s no fluff, no technical jargon, just 5 no-nonsense facts about loans that can help people with less-than-perfect credit scores or no credit history at all.
Actually, hold on, that’s a pretty good fact to start this quick facts about guarantor loans article with…
Bitesize Bamboo: 5 quick facts about guarantor loans
Fact #1: Guarantor loans are great for people with less-than-perfect credit scores or no credit history at all
Bet you never saw this one coming, eh? What a surprise…
But yes, guarantor loans are especially great for people with credit scores that could do with a little TLC along with those who have no credit history at all.
At Bamboo, we believe that a few financial hiccups shouldn’t mean a life of high-interest loans and an irreparable credit score, so guarantor loans are especially beneficial to those people who would like a bit of help getting back on their feet.
By having somebody act as your guarantor, you get access to better rates and higher borrowing limits, letting you borrow the amount you need to get back on track. Which means, even if your credit score is good, you can always benefit from a guarantor loan.
Which leads us onto…
Fact #2: Guarantor loans can help you repair your credit score.
We’ve said it before and we’ll say it again: a guarantor loan can help you repair your credit score or build one if you have no credit history at all.
Now, of course, getting accepted for a guarantor loan won’t magically fix your credit score. (Wouldn’t that be nice though!)
But making regular, on-time payments helps repair and rebuild your credit score. So does paying down your overall debt (if you are consolidating).
Plus, if you have a bad credit score, a guarantor loan can help you access better rates, making the debt more affordable in the long run and helping you get back on your feet quicker.
Fact #3: Almost anybody can be a guarantor for your loan.
Almost anybody can be your guarantor. They don’t have to be a homeowner (which is a common myth) or somebody you’re related to (another common myth).
In fact, as long as they’re over the age of 21, have a regular income and can afford to make your repayments should you not be able to, they can probably be your guarantor.
We recommend you choose somebody you trust — and who trusts you. Money can make relationships complicated, so it’s good to start from a place of honesty and trust.
It’s also important to know that your guarantor will also be subject to credit and affordability checks before they’re approved.
Fact #4: Guarantor loans are unsecured, which means you don’t have to offer your house or car as collateral.
This is great news! Lots of loans aimed at helping people with poor credit involve you using your house and car as collateral to make the loan cheaper.
However, that’s a little problematic in some cases: some people don’t have a car or house to use as collateral or if they have they’d rather not put it up as a collateral when taking out a loan.
Remember, you should always question yourself if a guarantor loan, or any form of borrowing, is suitable for your needs and circumstances.
Fact #5: You can borrow up to £8,000!
One of the things we hear the most about guarantor loans is that they’re only good for borrowing small amounts of money, but that’s just not true!
At Bamboo, we offer guarantor loans of up to £8,000 and some lenders are even offering guarantor mortgages that work on the same principle!
Plus, you can borrow up to £8,000 and pay it off over the course of 5 years, helping you spread the cost out, make the loan more affordable and repair your credit score at the same time.
If this little whistle-stop tour of quick facts about guarantor loans has sparked your curiosity, check out our in-depth articles on guarantor loans on our blog!
Best place to start: This story about David’s application for a guarantor loan isn’t just packed full of information on guarantor loans, but it gives you a look behind the curtain too, letting you see exactly what’s involved with applying for a guarantor loan. Check it out!
- Author The Bamboo Team
- Posted 5 August 2019