Your Guide To Getting The Best Guarantor Loans In The UK

Different types of unsecured loans include peer-to-peer lending, wedding loans, emergency loans, payday loans, home improvement loans, and guarantor loans. All these loans share a common characteristic – high interest rate. In these loans, the borrower does not provide any collateral, which may be repossessed if the borrower fails to repay the loan amount. Among all loans, guarantor loans have been found to have lowest complaint and fraud ratio, whereas payday loans have the highest ratio of fraud and complaint.

This is why, the Financial Conduct Authority has introduced new stricter rules for payday loans. However, considering the flexible nature of guarantor loans, the Financial Conduct Authority provides technical assistance and consultation regarding guarantor subsidiaries and assets.

Are you considering taking out a guarantor loan? This guide may help you!

Understand the Concept of a Guarantor Loan and Credit Report

Guarantor loans are often confused due to their complex association with the credit reports of borrower and guarantor:

  • A guarantor loan does not affect the credit report of a guarantor, unless the borrower fails to repay the loan amount.
  • The lender considers the credit report of the borrower, and not of the guarantor to calculate the loan interest.
  • The loan does not show up on the credit report of guarantor. However, if the borrower fails to repay the loan amount, only then the loan will show up as defaulter on the credit report of borrower as well as of guarantor.

The Safety of Guarantor

Anyone, who is 21+ of age, can become your guarantor. Many times, the parents become the guarantors, which is legally acceptable. The guarantor loan does not provide any kind of safety to the guarantor, except that they may consult the Financial Conduct Authority for guidance regarding the guarantor assets and subsidiaries.

The lender may chase the guarantor if the borrower fails to make the repayments. The lender may also take the borrower and guarantor to the court in extremities.

How to get the Best Guarantor Loans

Considering the aforementioned information, following are the important tips to get best guarantor loans in UK:

  • Evaluate your financial condition and make sure that you can repay the loan amount.
  • Consider the reason of borrowing a guarantor loan. The guarantor loans should not be borrowed for entertainment, home renovation, vacation, and such kinds of other reasons.
  • Choose a trustworthy guarantor, who is willing to repay the loan amount if you fail to make the repayments.
  • Most often, the guarantor loans come with high interest rate. Research the market and select a lender with lowest interest rates. Keep your cool as the research process may take weeks.
  • Negotiate with the lender. Your credit report is the best tool to negotiate, especially if you have improved your credit score in last six months.

Make sure to understand the consequences if you fail to repay the loan amount. Some lenders have stricter policies for loan repayments. Discuss the policies before signing the contract, or a wrong decision may put your credit report, as well as your guarantor’s, at stake.


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Getting out and about

Anyone who has been traveling will know that the world outside of the US is absolutely crazy–crazy in a good way I hasten to add. Oh–by the way. Welcome and than you for reading. So, what do I mean? Well… I’ve have just got back from traveling around the world. It took me a year and  I loved every minute of it. I started in South America… cause that seemed like the logical place to go before flying over to Europe, into Africa, over to the Middle East, across to Asia, South East Asia, Australia, the Pacific Isles, and  finally home.

Phew! What an adventure right? I can safely say that Asia–more specifically India–was my favorite destination. I place is absolutely crazy–its and explosion of people, cultures, religions, foods, sites, scenery–it’s amazing. I took the train everywhere and you wouldn’t believe how far you can go with not a lot of money. Meals can even be cheap… if you’re willing to eat the local food. If you ever get a chance to go… make sure you visit Agra and see the Taj Mahal. I have never seen a building of such beauty in my life before. What I also didn’t realize was it’s scale–it’s absolutely huge! That’s not to mention the site that it’s built on, which is equally huge. Now… what’s funny about Agra–a Muslim town–is that… it’s nothing special by anyone’s measure. Actually… it’s probably one of the more grotty places I visited, which is in stark contrast to the Taj Mahal. Maybe this is what makes it stand out more… who knows.

Traveling by train: this is a must-do activity. Now… what I don’t mean is for you to travel in first class. This will shield you from the real India experience. Instead, get general tickets and mix with the locals. They’ll be really happy to see you and interested to learn about you. What’s more, the doors to the carriages are left open in general class, allowing you to sit on the door step and to watch the world go by. There’s nothing better than doing this, take it from me.

Eating: Be wary of street vendors and anyone, literally anyone, who sells dairy products (including ice cream vendors). I bought an ice cream in Mumbai from a street vendor–a double no no–and was so ill that I dare not describe what exactly happened to me… it wasn’t nice. What’s more… I was ill for several weeks… in fact, I’m still not 100 percent right almost six months on. I’m not trying to scare monger you… just have your wits about you when buying food stuffs from small-time vendors.

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