Who Can Stand Guarantor On A Guarantor Loan?
The popularity of the Guarantor Loan continues to rise
, as many consumers are finding it harder and harder to obtain credit from the banks and the high street lenders.
This means that more and more people are now scouring their address books looking for a friend to act as their Guarantor, but do they know what they are looking for?
First and foremost the guarantor must be a homeowner. This does not mean that the loan is secured against their property, it merely gives the lender a degree of comfort. They must have a reasonably good credit history, and must have a regular source of income.
Traditionally when we think of a guarantor we think of a parent, grandparent, uncle, cousin or a friend. However, the Lenders are finding that neighbours, colleagues and even bosses are proving surprisingly popular. The only stipulation is that they are not a partner, living in the same address as the debtor.
It is also important that the guarantor understands what it is that they are signing up for. Essentially, they are guaranteeing that the loan will be repaid.
In the event that the debtor can no longer make the repayment, it is the responsibility of the guarantor to repay the loan on their behalf.
So why would you want to be a guarantor? In today's economic climate, obtaining finance is not easy for those that may not be as squeaky clean as others. Those that do not own their own home may leave the lenders with little security, meaning that they are less likely to hand out their cash.
As a homeowner, the guarantor gets the opportunity to become a knight in shining armour. Helping a friend or relative that may not be able to get a loan on their own will often leave the guarantor with a tremendous sense of well being.
by: Jon Miller
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