Can you get a guaranteed loan?
On this page we look at loans that are guaranteed by a guarantor.
One of the most affordable options on the bad credit market, this option should be explored before applying for one of the more expensive options available.
Please Note - this page is not about guaranteed approval loans (which incidentally are prohibited in the UK).
You can get a loan which is guaranteed by a loan backer
If you have a poor credit history and are looking for a loan, then the options can be limited and expensive. If you have the loan guaranteed by someone with a clean credit rating, however, lenders are able to make available much more affordable credit.
You cannot get a loan which is guaranteed to be approved
All loan approvals in the UK must be based on the status of the applicant and their guarantor. The FCA who regulates the UK industry prohibits any company offering any form of credit where it is suggested that applications are in any way guaranteed.
Can you get a guaranteed loan?
Clearing things up
This webpage is about guarantor loans, a type of loan that requires the applicant to have their application guaranteed by a loan guarantor.
So if you are looking for an affordable bad credit loan then you have come to the right place.
If you are looking for a loan with guaranteed approval, unfortunately you will be disappointed as this type of loan does not exist and is prohibited in the UK.
How these loans work
A guarantor loan is a type of loan that makes credit available to those with a poor credit history.
They require someone with a clean credit history to guarantee your loan application.
They typically have much better rates than other types of poor credit loan, and this is because the lender has the security of your loan guarantor.
Currently the representative APRs offered by lenders range between 39.9 and 54.9%, the rate that may be available to you will depend on how much you wish to borrow, for how long and the status of both you and your guarantor.
Loan amounts vary from £100 to £15,000, and repayment periods also range from six to 60 months.
Frequently asked questions
Guaranteed and guarantor loans, what is the difference?
The most common name for this type of credit is a guarantor loan, though it is also often called a guaranteed loan.
Both names mean the same thing, a loan that requires someone else with a clean credit file to back the application.
Finding a suitable guarantor is one of the most important criteria.
Typically, this person should have a clean credit history, be a United Kingdom citizen and be employed.
The most common loan guarantors are family members, though friends, or close work colleagues, or perhaps even your landlord might be suitable.
The best way to find someone is to ask them.
When you guarantee a loan you are agreeing to make the repayments if the person who took out the loan defaults. You become fully liable for their debt. So if you are going to ever guarantee someone else’s loan, you should make sure you are fully aware of the implications.
This is why we suggest that you only consider this if you fully trust the person whose loan you are being asked to guarantee.
Click for further details on being a loan guarantor.
We have a fully comprehensive and dedicated page on guarantor loans
- https://en.wikipedia.org/wiki/Loan_guarantee - Wikipedia
- http://www.investopedia.com/terms/g/guaranteed-loan.asp - Investopedia