It happens that you have a bad credit score but in need of cash that can only be obtained through a loan. In such a scenario, I would suggest that you go for a guarantor loan. I will not guarantee that you will be given the loan, but it is worth a try. Read on to get tips that will help you get a guarantor loan.
Find the guarantor
This is the first step. Find someone who will act as a guarantor for you. He or she will act as security for your loan. If you, the primary borrower is not able to make the payments, the bank will go for the guarantor. It is of importance that you choose one with a good credit score rating.
Know the risks
It is important that you tell your guarantor the responsibilities and risks he is getting himself into. A guarantor can be anyone from sibling, friend, parent or any other person you choose. You should not trick anyone to become your guarantor. They should be aware of what awaits them, or what they will be needed to do in case you fail to make the payments needed.
Payments should be made on time
Do not assume that because you have a guarantor, the bank will give you the loan straightaway. No, they will still check your credit rating to see if you are still able to get pay the loan in time. The repayment amount is put within 1/10th of your monthly income. This way the bank will be sure that you can pay.
It is best if you applied for the loan directly from the bank. You would get extra charges if you applied for the loan through a broker. Take yourself to your lender to get rid of any extra charges.
Select the lender carefully
You should not work with a random lender. I would advise that you talk to a number of them and get their quotes. This is the only way to choose the best lender. A guarantor will give you the opportunity to get the loan even with your bad credit score.
Keep in touch
It is advisable to keep your guarantor updated in case you get problems making the payments. The lender and guarantor will be happy to understand your problems or difficulties early enough. This way, they will help you solve the problems early.…