Can you get guaranteed bad credit loans?
Lenders may advertise online loans which are guaranteed.
In this article we discuss what it really means to have a loan which is guaranteed.
Along with why they may still be available to you even if you have a poor credit history.
1. You are never guaranteed to get a loan
As discussed in our article 'Can you get bad credit loans with a guaranteed approval', you cannot be guaranteed loan approval, not from any lender. In fact, in the UK lenders are not allowed to make any form of guarantees.
There are lots of options today in the bad credit loans market where the acceptance criteria are fairly relaxed, but you pay a price for this, as the interest rates are very high. You have probably seen the negative press surrounding short-term pay day loans and these are the type of loan you want to avoid unless you have very particular financial circumstances and these are your only option.
So while there are options available you, there cannot be guarantees under any circumstances. For more information see our article referred to above.
2. Someone could guarantee your loan and become your guarantor
A loan guarantor is someone who 'guarantees' your loan, by being legally liable for the loan and making loan payments if you ever stopped. Having someone with a good credit rating back your loan application means you are much more likely to be able to borrow the money you need as the risk to the lender is substantially reduced.
The liabilities on your guarantor are just the same as if they had taken the loan out themselves, so it is a serious undertaking.
Hence the reason why we, as well as our lenders, always state that this should be a person who trusts you, and with whom you have a good relationship.
This is often referred to as "guaranteeing your loan" although, as you can see, it is very different to guaranteeing that you can get a loan – not to be confused.
Guarantor loans come in all shapes and sizes, from small £100 to £500 loans with a representative APR of 302%, to the more affordable larger loans from £500 to £15,000, with current representative APRs from 39.9% to 54.9%.
For more information see:
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