There are quite a few myths surrounding guarantor loans that you will want to know about before you apply for one. These loans can be incredibly helpful for those who have bad credit, but you certainly don’t want to rush into anything. The more time you take to look into these loans, the easier it will be to get the money you need without any regrets later on. Learning the facts about guarantor loans is crucial before you fill out an application for one.
You Need to Put Down Collateral
A lot of people still believe that guarantor loans require the borrower to put down collateral, but the truth is that you do not. You won’t have to risk losing any of your property to get the money you need like you would with a secured loan. One of the reasons why so many people in the UK apply for these loans each year is because they are so low-risk. If you want to get a loan with bad credit but don’t want to risk losing your home or car, you’ll be happy to know that collateral is not needed.
Documents Are Needed to Get Approved
You will not have to submit any documents to the lender when applying for a guarantor loan. This makes getting this type of loan so much easier and less stressful. The person who will be acting as the guarantor will most likely need to submit documents proving their income, but you will need. This also makes the process of getting the loan you need go a lot faster, which is a great thing if you need money quick.
Guarantor Lenders are not Trustworthy
There are plenty of legitimate and trustworthy lenders who give out guarantor loans, so you should have no problem finding one that you can depend on. It is important that you take the time to review your options before choosing a certain lender though. Those who take enough time to do this research will get the money they need without having to be concerned about getting scammed or ripped off in any way. Take some time to look up reviews for these lenders so that you will be able to find one that is flexible and will work with you as much as possible.
There are Always Hidden Charges/Fees
While it may be true that some unscrupulous lenders charge hidden fees, this is certainly not the case for all of them. As long as you make a point to find a trustworthy lender, you will not have to deal with this issue. The fact is that a vast majority of these lenders do not charge additional fees, so you will have nothing to worry about. It is always a good idea to look over the loan contract carefully before singing though. You will need to know exactly what the terms and conditions of the loan are, including all of the fees you’ll be required to pay.
Borrowers’ Information isn’t Secure
It is a complete lie that your information won’t be secure if you apply for a guarantor loan. All legitimate lenders take the necessary measures to completely protect their borrower’s information from being stolen. When you are looking for a place online to apply for one of these loans, just make sure there is a “https” before the website’s URL. This way you will know that any and all information you submit through the site will be kept completely secure.
There are Additional Charges for Speedy Approval
One common myth about guarantor loans is that you need to pay an additional fee to speed up the processing of your application. In reality, these applications are normally processed quite fast. This means that you will hear back from the lender within a day or so after submitting your application. The quick approvals that are associated with these loans are partially why so many people get them every year. If you are in a situation where you need money fast and cannot wait, this is an excellent option to consider.
Penalties for Bad Credit
Guarantor loans are ideal for those with bad credit, because getting approved is typically very easy. There are no penalty fees for those who apply with bad credit. You will not have to pay any more for one of these loans if you have a low credit rating. Most of these lenders are more than accommodating when it comes to helping people with spotty credit histories. The fact is that no reputable lender will ever penalize you for having bad credit, so you will need to remember that when doing your research.
You Absolutely Need a Bank Account to get Approved
There are some minimum requirements that you will have to satisfy to get approved for a guarantor loan, but having a bank account is actually not one of them. A lot of these loan companies offer services for those who need the money in cash because they do not have a bank account. This will make getting the loan you need a lot easier.
Your Credit Score Will Suffer
Those who apply for guarantor loans will not have to worry about their credit being negatively impacted at all. The only way that your credit is going to suffer from getting one of these loans is if you don’t pay it back on time. It is very important to make sure that you know when your loan must be paid back so you don’t have to deal with a strike against your credit.
Should You Get a Guarantor Loan?
There are numerous things to consider before getting a guarantor loan, including whether or not you will be able to find someone to act as your co-signer. You should also determine whether or not you are financially stable enough to pay back the loan on time. By considering these things you will reduce the possibility of problems later on down the road.