3 Top Tips on Finding The Cheapest Guarantor Loans
There is a lot of choice in the market today with more lenders advertising.
With more options than ever before, it can sometimes be a little overwhelming.
It's important to remember that a little background work can potentially save you money.
When compared to the 'high street' personal loans offered by the banks and mainstream lenders, the APR of a guarantor loan may seem expensive as the rates being charged can be four or five times as much.
On the other hand, they are significantly cheaper than the other types of poor credit rating loan on the market, and in our view the best option if you can find yourself a suitable guarantor.
There is, however, still quite a difference between the rates charged by the different lenders and the products they have, with currently the lowest APR being 39.9% and the highest 302%.
So we look at a process we think will help you to narrow down the market, and access you the best value loan you can get.
1. Can you borrow from family or friends?
If you are considering one of our loans, then at some point you are going to have to ask someone to guarantee your loan. If you are going to be doing this why not beforehand think if there is anyone you know that you could actually get the loan in full from?
All rates are still relatively high, and if you offered someone a good rate of interest for borrowing money from them instead, they may be interested.
Before you do this, it is worth doing all your homework before hand
- Have a good reason why you need the money, and exactly how much you need
- Be able to clearly demonstrate that you can comfortably afford the repayments
- Know how long you want to borrow the money for
- Know the interest rate you offer to pay them in return for borrowing the money
To help you do this use our loan calculator:
- Step 1: Enter Loan Amount
- Step 2: Enter the proposed rate of interest you will pay
- Step 3: Ignore the deposit field
- Step 4: Add the months or years over which you will pay the loan
- Step 5: Click Calculate
2. Be aware of the criteria for the cheaper and more expensive loans
Before you start browsing the different loan options, it is worth understanding the criteria for both the cheaper, and more expensive loan options.
Typical cheapest loans criteria:
- You being a homeowner
- Your guarantor being a homeowner
- You both are able to clearly show a disposable income to comfortably afford the loan
- Guarantor has a fully clean credit rating
- Your credit rating is not 'too bad'
Typical most expensive loan criteria:
- You wish to borrow £100 to £500 (our only lender’s representative APR in this band is 302%)
- You are both tenants
- You both have limited, or no income
- You are in a DMP (debt management plan)
- You have a 'bad' credit history
Typical criteria where you cannot get a guarantor loan at all:
- No guarantor
- You are insolvent – bankrupt, IVA, Trust Deed (Scotland)
3. Compare Loans
Now you know how much you can afford, plus some outline criteria, it is the time to shop around and start comparing the different loan out there.
We offer two ways of doing this with our loans:
- Compare Loans Table
We have summarised all our loans in our compare table, where you can sort all the different loans according to APR, lender name, cost per month, time to apply, and Optio score. See our compare loans table.
- Best for you loan selection
Based on your criteria, loan amount / length etc., our system will take your details and find for you the very best lender according to cost and our Optio score.
It is worth taking your time to find the best rate, for over the length of the loan you could save yourself a great deal of money.
Use the loan calculator below to estimate monthly loan repayments.