How Loans with No Guarantor Should Be Your First Choice?
Experienced borrowers know that it is comparatively very easy to get a loan in which a guarantor is involved. Moreover, the good credit history of the guarantor makes it easy for the direct lender to approve the loan because of the guaranteed security that the co-signer brings to the table during the loan deal.
In this article, we will try to understand that even though the approval is easy and almost guaranteed with a guarantor, them why do loan advisors strongly recommend opting for long-term loans with no guarantor as a better option.
Who can be a Guarantor or a Co-signer?
A guarantor is somebody who consents to pay whatever is due from the borrower’s end in case the lender does not receive the total principal amount along with the interest. Basically, the guarantor goes into an agreement with the lender consenting to assume liability for settling the total loan. This assurance opens him or her to a severe vulnerability.
When defaulted, the borrower receives notices from the lender but after a certain period, the notice is forwarded to the guarantor. In case he or she defaults on the payment, then the lender can take the legal route to take back his money. This not only affects the borrower’s credit score but it also devastates the credit score of the guarantor.
To avoid such circumstances, lenders ensure that the guarantor must:
be a minimum age of 18 and maximum of 75
have a good credit history
should have a collateral
The aforementioned criteria may vary from lender to lender but most of the direct lenders refrain from putting this information on their official channel. However, while signing the deal, it is the responsibility of both the agent as well as the recipients to know and understand all the terms and conditions involved in the loan deal.
What are the Benefits of No Guarantor Loans?
No guarantor loans are extremely prevalent among borrowers, especially in the UK. The application procedure in such loans takes less time since lenders just need to conduct a financial background check including the credit score and the alternative data check of just the borrower rather than that of the guarantor as well.
This makes getting a "yes" or "no" on your loan application a straightforward process. Such prompt response also enables you to rely upon No Guarantor Loans for urgent situations where you may want some money to repair your home or car, or invest in a short-term or long-term financial goal.
Having a bad credit certainly puts the borrower a few steps back in the deal as the loan approval then depends totally at the discretion of the concerned direct lender who most probably would be pressing high interest on the borrower.
How do Long-term Loans with No Guarantor Help Your Credit Score?
Guarantor loans, when mentioned in your credit history, do not make a good impact when considered by any lender. Even if you were leading the deal, the direct lenders usually assume that the guarantor would have been driving the wheel. Acquiring credit especially personal loans or long-term loans with no guarantor can help uplift your credit authority enabling you to apply for the loans you wish to apply in the future with the least possibility of loan rejection.
How Can I Find a Guaranteed Loan Lender in the UK?
Whether you are in any Britain, Wales or Northern Ireland, you can easily apply for no guarantor loans by contacting the concerned lender through a call, email, in some cases - text, and through their official website. Although there is a fair amount of risk involved in such transactions, following some basic background check on the internet itself or by personally contacting them, you can easily avoid and sort fraudulent individuals or organizations from the legitimate direct lenders.
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