Last post: Jul 6, 2017
Taking on a guarantor loan can be a helpful way to access finance when you have a poor credit record, but it's important to prove you are reliable and dependable to your guarantor before the loan goes ahead.
Sometimes bad credit just happens. Managing your finances isn't the easiest of tasks, and very few of us get things right 100% of the time. Unfortunately, if you've accrued a poor credit score, you can find it very difficult to access loans, particularly unsecured loans which are often required when emergency expenses crop up.
This can make life extremely difficult when you're confronted by an unexpected expense after a tricky month or three. If you need access to short term finance, many lenders can't help you if your credit rating is poor. In these instances, it may be recommended that you look into using a guarantor loan.
Guarantor loans are short term, unsecured loans in which another party (often a family member or friend without poor credit) agrees to be held responsible for your loan if you miss payments. In such cases, your guarantor would be liable for your loan.
For some of us, asking a guarantor isn't a problem, for others, finding somebody who will agree to guarantee a loan can be trickier. Many people worry about your ability to meet payments, which means proving your dependability and demonstrating a clear repayment plan becomes critical.
Here's how to demonstrate your dependability to your guarantor:
- Share your numbers
It's all very well saying you've got things under control, but your guarantor will be much more reassured if they see cold, hard numbers. Create a spreadsheet which shows all of your monthly earnings and outgoings so they know you can afford the loan.
- Show them the dotted line
Giving guarantors a chance to look over documentation from your prospective loan provider will help them to feel more comfortable with the process, helping them to understand all the ins and outs of being a guarantor.
- Explain why you need the loan
Understanding the essential and sensible reasons why you require a guarantor loan will help potential guarantors understand where you're coming from and trust that you're approaching the process responsibly – not planning on frittering the money on holidays and gadgets.
Keen to learn more about how guarantor loans work? The Choice Loans team can offer advice and information.
If you're ready to start the guarantor loan process, we're here to support you too. With loans up to £6,000 for those with non-homeowner guarantors, and £10,000 for guarantors with a home, we offer flexible loans you can tailor to meet your specific requirements.
Comment