Thousands are now looking into bad credit guarantor loans simply because their credit is not what it used to be. When you have bad credit, it can be extremely tough to be eligible for any type of loan and it’s frustrating to say the least. However, just because you have bad credit, it doesn’t mean to say that you cannot still get a loan. Guarantor loans might be the best solution to your problem. The following is just five frequently asked questions about guarantor loans.
What’s The Risk to Me?
Borrowers and guarantors both ask this question. So, what is the risk? Well, if you fail to repay the loan, your credit will probably be even more affected. For those who already have bad credit, it may become impossible to get any further loans in the future. You will still be obligated to pay the loan even if you choose not to make repayments. For guarantors, they will be required to pay the loan if the borrower fails simply because they are the guarantor and have signed up to pay the loan should the borrower fail to do so. Guarantor loans might not be ideal especially if you are thinking about going guarantor for someone who is irresponsible.
What Does It Involve?
For guarantors they absolutely want to know all risks involved and what it takes to be a guarantor. Usually, guarantors have to have fairly decent credit in order to be a guarantor however they will be the next person to pay the loan should the borrower fail. As said above, this is a major risk because you will have to pay the loan or risk getting a judgment against you. However, usually people pay the loan and that is it. Once the repayments have been made and the loan ends, you are no longer the guarantor. Bad credit guarantor loans can be fairly easy to work with as long as you know what you’re doing.
Will My Credit Be Affected If They Fail To Repay?
Whether you are the guarantor or the borrower, if the payments are not made credit will be affected. For those already with bad credit, it will be another mark on the credit report. However, guarantors can also face credit problems should the initial borrower fail to make payments. The reason why is simply because you are also named on the loan which means you are responsible in part for the loan. You signed up to the loan and since you’re the guarantor you need to pay. Guarantor loans are not always ideal and really they can impact your credit if you fail to repay. It’s a major problem to say the least. More details here: http://www.money.co.uk/loans/guarantor-loans.htm
Will I Be Obligated To Pay?
In all honesty, if you are taking out a loan, you should pay, even if you feel it’s not longer your responsibility. At the end of the day, you took out the loan and you should be responsible for it. For guarantors it might actually be in your best interest to make the payments should the other party fail so that your credit doesn’t get ruined. In terms of obligation, yes, you will be obligated to pay. Bad credit guarantor loans have to be paid. It doesn’t matter if you haven’t used the money, as the guarantor you have to pay since you signed for the loan.
Who Is Eligible For Guarantor Loans?
If the guarantor has fairly good credit then it is very likely they will be eligible to sign up as a guarantor. However, if they too have poor credit or their credit isn’t as good as it could be, the lender may refuse them as guarantor. Of course, every lender has specific guidelines in which borrowers have to follow. You shouldn’t have too much trouble if the bad credit guarantor loans have a guarantor with good credit.
Be Wary When Using a Bad Credit Loan
Going guarantor for anyone is a risk no matter if you believe they will pay the loan back or otherwise. At the end of the day, you are putting your credit on the line and if they should fail to repay, it’s you the lender will come after. Always think before acting as guarantor and before applying for any bad credit loan too. If you are going to look into them, always find the very best guarantor loans.