If you are looking for a loan, there are many factors that come into play. You need a good credit rating, with no county court judgements or black listing against you. You also need to be able to show clearly that you can both afford the loan and be able to pay it back. For many people, fulfilling all these requirements are impossible, especially if you have a bad credit score. But there are other ways to get a much needed loan that don’t involve either a bank and a loan shark. A guarantor loan is one of these.
A guarantor loan is a loan where a person with bad credit may be able to borrow money due to a member of their family or a good friend guarantee that the loan will be repaid. Guarantor expert company Glo (part of the Provident family) currently offer these sorts of loans, offering from £1,000 to £7,000. For Glo loans, the guarantor doesn’t have to be a homeowner – a tenant can also stand as a guarantor, but the person must have a very good credit rating as they are ultimately taking responsibility if you are unable to pay. The person cannot be your partner who shares any of your financial responsibilities.
Glo has fixed interest rates, so you know from the beginning what your monthly repayments will be, which should help you to budget the payments into your monthly accounts. Payments can be made over a length of time that suits you, ranging from one to five years, again helping to make your repayments affordable as part of your monthly expenses.
Ultimately, Guarantor loans require a huge level of trust, honesty and understanding between the borrower and their guarantor. But if you are someone still living at home with parents who can be guarantors, or someone who struggles for credit due to a past mistake, or due to working as a sub-contractor, or on a freelance or other self employed basis, this may be another option open to you.