Is a loan out of the question, think again
If you have a bad credit score, you may think a loan is out of the question. However, thanks to guarantor loan companies such as GBP Loans, there is a way to get that cash injection you need.
To receive a guarantor loan, you need another person to agree to act as your guarantor. It is very similar to the common process of using a guarantor to secure a property rental. The person you choose as your guarantor must sign an agreement to say that they will repay your loan if you are unable to do so. This gives the loan company an assurance that they will get their money back.
The guarantor could be a friend, colleague or relative, but cannot be financially linked to the loan recipient. For example, a husband or wife would not be suitable. In order to qualify as a guarantor, the individual must prove that they will be able to repay the loan if you are unable to do so. They must own their own home and have a very good credit history.
In order to encourage someone to act as your guarantor, you could sign an indemnity agreement. This means that you agree to repay the guarantor if you default on your loan repayments and they are forced to pay back the loan on your behalf. This is a common way to give the guarantor peace of mind that they will not end up out of pocket.
In contrast to a payday loan, a guarantor loan is not a short term loan. Its terms typically range from one to five years. The amount of money loaned can range from £500 to £7,500 and the size of loan offered will depend on your individual circumstances.
A guarantor loan is a good way to overcome a bad credit rating if you need a loan and are confident that you will be able to repay the money. It is also a good way to improve your credit rating, as it is an opportunity to prove you can pay back loan repayments on time. However, you should consider the potential repercussions if you are not able to pay off the loan within the agreed time period.
Guarantor loan companies have high APRs (annual percentage rates) because of the risks they undertake as they regularly deal with people who have a history of financial problems. However, the APR is typically much lower than that of payday loans companies. For guarantor loans with www.gbploans.com, for example, the APR representative is 53.8% variable.
Once your loan is agreed and your guarantor has provided proof of their financial stability, you will receive the money in your bank account within one business day. The loan company will aim to make the approval process as quick and simple as possible, so if you are in urgent need of money your payment will not be delayed, as long as you can provide the necessary information.
In order to be approved for a loan, you will need to provide proof of your identity and home address. This could include a passport, driving licence, utility bills and recent bank statement. It is up to the lender to decide which documents are necessary to approve the loan, so this often varies. There is no cost involved in applying for a loan, so if you are not approved you will not be charged.
Hundreds of people every day are helped by GBP Loans, when they have been turned down by banks and other lenders. The decision to apply for a guarantor should be taken very seriously and carefully considered, but it can be the much needed lifeline to help you get your life and finances back on track.
Hugh Tyzack is founder and Managing Director of GBP Loans Limited, which was formed in 2008. GBP Loans specialises in no fee Guarantor Loans. GBP Loans has been a driving force in trying to eradicate bogus fee charging and is now one of the UK’s biggest providers.