If you have bad credit and looking to take out a loan, one of the most popular options worth checking today is guarantor loans. As opposed to other loans offered especially for borrowers with bad credit, guarantor loans offer a few advantages making the financial product more favorable than the more notoriously popular options such as payday loans.
A guarantor loan, as the name suggests, is a type of unsecured loan that requires a guarantor to co-sign the debt agreement with the borrower. You can borrow anywhere from £500 to £7,500 or sometimes more depending on your lender. The loan is expected to be repaid in 12 to 36 months.
Compared with other loan products for people with bad credit, guarantor loans, I believe, are the most affordable options available in the market today. It may not offer a high loan amount as secured personal loans but guarantor loans take the cake when it comes to the interest rate. The average representative APR (annual percentage rate) for guarantor loans is somewhere at 49.9%. That’s many times lower than payday loans and logbook loans with average APRs at 1,000% and 400% respectively.
If you’re looking for a quick cash solution to your financial problems and you have bad credit, guarantor loans are your best bet in terms of interest rate. It won’t be as cheap as other traditional loans but it’s definitely way more affordable than other bad credit loans.
Getting approved for a guarantor loan, however, isn’t going to be as easy as when you’re applying for a payday loan. Both loans do not run credit checks on borrowers but guarantor loan lenders run one on your guarantor. This is the part why it make take a few days before your receive your money when you opt for a guarantor loan.
As the borrower with bad credit, it may also be harder to find a guarantor who will be willing enough to co-sign the debt agreement with you. Finding a guarantor can take time too but as soon as you have one, guarantor loans make a suitable loan option that offers just the right blend of cost and convenience.