If you are planning to consider a guarantor loan then you might have few questions yourself as well as your guarantor. Check out the two sets of FAQs which have been created for both the Applicant and the Guarantor.
- Can you still help if I have had financials problems in the past?
Yes! Guarantor loans are precisely for people who have had a poor credit rating. These loans in fact split the past credit from the future. If you have been denied a loan from the traditional lenders, you can always opt for a guarantor loan. Our sole aim at ARDOR3D is to help applicants like you get guarantor loans quickly and effectively from the most trusted lenders in the UK.
- Why do I have to be backed by a guarantor?
A guarantor is needed if you want your credit problems to be ignored by the lender. Traditional lenders make use of the credit score to identify the risks associated by lending a loan. However, being backed by an acceptable guarantor will make the lender ignore your own credit history.
- Will I be credit checked?
Few lenders carry out a credit check for the sake of identification. The credit check does not impact the decision of sanctioning a loan to the borrower. It is entirely dependent on the guarantor backing your loan application. Hence it is advised to get a suitable guarantor when applying for a loan.
- How much can be borrowed?
Guarantor loans vary from £50 to £10,000. There are two kinds of guarantor loans:
- Short term loans [up to £750 ]
- Long term loans [£500-12,000]
An affordability test is conducted by a lender before sanctioning the loan amount. The
lender may not sanction the entire amount so as to not place a borrower under financial stress.
- How quickly is a loan processed?
It is possible to get a loan within 24 hours. This happens when a borrower has the application backed by an acceptable guarantor and by furnishing all the necessary documents along with the application. It is best to have a list of alternative guarantors so as to not waste valuable time.
- Is it vital to have a guarantor before applying?
No. It is not necessary to have a guarantor before applying. However, having a guarantor while applying for a loan speeds up the approval process.
- Who will make an acceptable guarantor?
The criteria for being an acceptable guarantor:
- Resident of UK aged between 18-75
- A good credit rating
- Regular source of income or pension
- A bank account in the UK with a debit card
- Not linked to the applicant financially
It isn’t mandatory for the guarantor to own a home. However, the applicant would be able to borrow more than £7,500 if the guarantor is being backed by a home owner as a guarantor.
- What should I do when I am asked to be a guarantor?
The first thing to do is to decide whether you would be happy to be a guarantor to the borrower who is seeking a guarantor loan. You should answer the following questions in order to make the right decision:
- Do you know the borrower well enough to trust?
- Do you have faith in the ability of the borrower to repay the entire loan amount?
- Would you lend them the money if you had the amount they were looking for?
These questions will let you determine whether you should back the application or not.
- What are the criteria to make a suitable guarantor?
The criterion to be an acceptable guarantor is dependent on several factors:
- Resident of UK
- Aged between 18-75
- Having a regular income or pension source
- Having a good credit history
- Are there any risks associated with being a guarantor?
The primary risk for the guarantor can be the failure of the borrower in making loan repayments. In such cases, the guarantor has to make the payments to be done. The lender has the right to initiate legal proceedings against you if you fail to do so.
- Can I back out after having agreeing to be a guarantor?
Yes! You can always change your mind at any point before having signed the agreement. Once the agreement has been done, you need to continue and cannot pass on the responsibility on somebody else. It would be better to consider the request thoroughly when somebody asks you to be their guarantor.
- Would I be credit checked? Will this impact me?
A lender would process a loan application only after being assured about the capacity of the guarantor to repay back the loan amount. Hence, a credit check is carried out on a guarantor. This doesn’t impact the guarantor by any means.