How to Apply for Guarantor Loans

Guarantor loans are a reasonably new type of loan, but they are quite different to many others. It is good to find out about how they work and how you apply before deciding whether this type of loan is suitable for you.

What is a guarantor loan?

A guarantor loan is a short-term loan which allows you to borrow larger sums of money than other short-term loans and repay them over a longer period of time. Many short-term loans have to be repaid in weeks or months and you can only borrow small sums of money. A guarantor loan will allow you to borrow more money and there is a big difference in that you need a guarantor. This lowers the risk for the lender and this is why they are prepared to lend more money in this situation than other short term lenders who tend to lend only small amounts. This is someone that has a good credit record that will be prepared to cover the cost of any repayments that you miss because you cannot afford them. This will obviously need to be someone that is close to you as not everyone that you know will be prepared to do this for you.

How to choose a guarantor

Choosing a guarantor can be a really big decision as it could have a big impact. Firstly, you will need to choose someone that has a good credit record. You may know quite a few people that fit this description or you may not know many. Either way, this is just the first step. From those people, you will need to choose someone that you feel will be willing to help you out. There will be some people that would be more than willing to help but there will be some that will not and of course, in both categories there will be some that you are not sure about.

Once you have done that easy bit you need to think about your relationship with those individuals. It is important to think about what impact it might have on your relationship with them if you do ask them to be your guarantor. You will have to explain to them that you have a bad credit record and need help with borrowing money. They might want to know why and what has happened and may judge you on that. They may feel sorry for you and want to help or they may feel you have been reckless and think that you should not have got into that situation in the first place. Do you will need to think carefully as those that judge may feel they do not have the same respect for you afterwards.

Even if you find someone that will look kindly on you things could still change between you. If there is an issue with you repaying and they end up repaying a lot for you then they may not be happy. They may expect you to repay the money quickly and if you cannot do that, they may not be happy with you. They might also need the money and then you would feel guilty for asking them for the money. They might even get annoyed with you for that as they may assume that you will be able to make all the repayments.

You might even find that other family members or friends get jealous that they have chosen to help you, particularly if they then need money and cannot get the help from your guarantor as they are already helping you. This will be more of a problem if there is a lot of jealousy in the family or between friends. This can cause lots of problems and even a break down in relationships so you will need to think about whether this is something you are prepared to risk.

How to apply

The application will be really straightforward compared to the decision making that comes before it with regards to choosing who to be your guarantor. You will need to have the details of yourself and your guarantor and they will need to sign documents as well as you. Applications will be simple and they will often be online. You will need to enter basic details so that they can identify you and check out your address and credit rating and it is likely that you will both have to provide ID as well to prove who you are. Then you should be able to very easily apply for the loan. Obviously, the lender will need to decide whether they are happy to lend to you but it is likely that they will be happy as long as they approve of your guarantor and are confident that they will be able to make repayments if you are unable to.

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Choosing the best Lenders of Short-Term Loans

Short term loans are increasing and so it can be harder to decide which lender might be the most suitable for us. Most of these types of lenders are not well known either and so we may not have had past experience of using them or heard very much about them. This means that it can be hard to easily choose between them. However, there are things that we can look at for which might help us to make up our minds.

  • personal recommendations – it can eb worth asking people you know whether they have had any short-term loans. It can be tricky to admit that you need a short-term loan and want help but you could always try to bring the conversation around to them without mentioning that it is you that needs the loan. This could help you to get the information you need without mentioning that you actually need a loan. You might also find that you will be able to ask some people quietly when it is just you and them and then they might be more likely to share the information that you need from them. 
  • online reviews – reading reviews online can help you to find out more about a lender. It is useful to be wary though as some reviews may not be genuine. You may find that some companies pay people to give good reviews and others will give bad reviews to their rivals to try to stamp out the competition. While there is no evidence to suggest this happens in the area of short-term loans, it is still wise to remain wary of this sort of thing happening and make sure that you are prepared just in case. It can be a good idea to only read reviews on websites that you trust or look at a big selection of reviews from different places so that you
  • Website – it can be useful to take a look at the lender’s website. This should give you some information about what they are like as a company and what their loans are like. You might get a feel for what you think they might be like to deal with and you should be able to find information about them as well, such as how long they have been in business and how they were founded which could help you to decide what you think of them. You may want to do other research online to find out more about the lender as well. You might find out some company accounts, something about them on Wikipedia or things like this would could be helpful for you.
  • Prices – it is always a good idea to compare prices between lenders. Although the cheapest will save you money, they may not be the best, but you may also want to avoid paying more than necessary. Therefore, take a look and think about how that sits with you. Do you feel happy paying that price to that lender or do you think they are worth a bit less or a bit more? Think about whether you feel that they will offer you good value for money.
  • customer service – for some people how well they are treated by the lender is really important. If this is something that is important to you as well then it can be worth getting in touch with their customer service department. If you get in touch using the method that you feel that you would if you borrowed through them then you will be able to find out how quickly they will respond using this method. You will also be able to find out how good they are at answering your query and how polite they seem. This can all help you to build up an impression.

Although doing all of this research will take time, it will be worth it. You will be able to know that when you do pick the lender, you will have done lots of research and based your decision on the information that you have gathered. Hopefully that will mean that you will pick the best lender for you and will end up being able to get a loan that offers you really good value for money. It is worth noting that there are different types of short-term loans and some lenders may only offer one or a limited amount of types. Therefore, if you have a specific loan type in mind, then you will need to bear this in mind. You may find that it might be best to find out who offers this loan first and then compare those lenders as that will take less time. Even if you do have limited time it is always worth doing as much research as you can.

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