What Is a Guarantor Loan?
If you’re yet to establish a credit score or have a chequered financial history, your eligibility for vehicle finance may be affected. Likewise, if you’re unable to provide proof of income or your current financial status, some lenders may consider you a high-risk applicant.
In which case, you could be the ideal candidate for a guarantor loan. If you’re unable to qualify for financial support alone, you have the option of asking another person to guarantee the loan on your behalf.
How Do Guarantor Loans Work?
If your application is rejected or you suspect you’ll fail to qualify, a guarantor loan could help you access the vehicle finance you need. In the simplest terms, guarantor loans involve a second individual in a better financial position, who ultimately takes responsibility for the loan.
The loan is formally taken out in the name of the primary applicant (you), who remains liable for meeting all agreed repayment obligations. However, should the primary applicant default on their obligations, it falls with the guarantor to settle the balance and pay any applicable penalties.
At the time of entering into the agreement, the guarantor will be required to go through the same verification checks as a standard applicant. This may involve providing proof of income, undergoing credit checks, verifying their identity and so on. If the guarantor qualifies for the loan, they can sign into the agreement on your behalf.
After which, your vehicle finance product will be offered in the normal way.
Who Can I Ask to Guarantee My Loan?
Technically speaking, you can ask anyone who knows you and trusts you to guarantee your loan. Most guarantors are close friends or family members of the primary applicant, but it’s not unusual for colleagues, bosses and business partners to act as guarantors.
In the eyes of the lender, anyone in a stronger financial position than you represents a potentially viable guarantor. Working with PoorCreditCarFinance.co.uk, a guarantor loan can be just as quick and easy to arrange as any of our conventional vehicle finance products.
Best of all, we’d be happy to provide you with a 100% risk-free ‘soft’ credit check, in order to establish your eligibility without leaving a mark on your credit report. As a leading specialist in poor credit vehicle finance, there’s a strong chance you’ll qualify with PoorCreditCarFinance.- co.uk – even if you’ve been turned down elsewhere!