The guarantor loans market place is increasing in size day by day and at the same time the economy is slowing getting it?s way out of the recession period to brighter times ahead (hopefully). Guarantor loan products or ?loans with a guarantor? are frequently aimed at those that have a poor or bad credit history, and those that do not own a property of their own to secure finance against. A common question posed to people in this industry is why do I need a guarantor to get a loan?
The answer is very straight forward; there are thousands of people that have had no credit in the past, a poor or bad credit rating or may not own their own home. The people who are in these situations may be attempting to obtain finance, while at the exact same time the high street lending companies, banks and building societies are proving ever more reluctant to lend to anyone who has a less than ideal credit history or background. The alteration in market attitudes has lead to many people struggling to get the finance that they desperately need for one reason or another.
In the past, obtaining credit was quite straight forward and easy for everyone; however this was a few years ago when the financial world looked completely different to what it is today.
At the end of the day, this has to mean that the options for people that don?t fall into the perfect credit category by the lending companies are looking somewhat limited. However, luckily someone always comes up with a good idea when it is most needed, and this is exactly what has happened with the guarantor loans products.
By just adding a homeowner onto your loan application in order to effectively guarantee the repayment of the loan, the lender is able to be more flexible, and responsive with their lending. Lenders slacken their criteria for guarantor products and they usually also offer lower rates of interest to balance out the increase in security they offer.
It is important to get over the stigma of having someone ?assisting? you when taking out finance. You have to be realistic and face the fact that, maybe through absolutely no fault or negligence of your own, you may not be able to get a loan without help from a third part or without extortionate interest rates. Remember, your guarantor will be doing it for your benefit, not theirs.
If you find yourself a guarantor, then hopefully one of the guarantor loan lenders will make you an offer you can?t refuse.
Source: http://studentloans-withoutcosigner.com/why-does-anyone-need-a-loan-guarantor/
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