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Do you badly need to loan but you have a poor credit score? Well here’s an idea for you. This is very simple and you just need to have someone who’s willing to help you apply for a loan. It can be your family or someone you’ve known for a long time. They call it a guarantor loan.
What is a Guarantor Loan?
So, what is a guarantor loan? It is a type of loan wherein someone from your family or friends will be the one who is responsible for repaying your loan if can’t afford it anymore. The guarantor must be aged between 18 and 75 and should have a good credit history and a stable source of income. Some lenders require that your guarantor should not be your husband or wife and have separate finances from you. This is quite good for those for those who have bad credit score. There could also be risks here like your good relationship to the guarantor so if there’s someone who’s willing to be your guarantor don’t take advantage of them and don’t let them shoulder your debt. Sometimes parents act up as guarantors for their children to help them start up a business or to buy them property.
What if the guarantor failed to make repayments for your loan? Then their assets might be at risk as collateral for repaying your loan. If the guarantor keeps on repaying your loan it won’t affect your credit score but if he/she fails to make payments then it will be added to your credit report. So better choose a guarantor who has various source of income. Lenders will make a series of checks before approving a guarantor loan to see if both of you have the capacity to repay the loan.
Seeking a Guarantor for A Loan
Now remember, before you get a guarantor on a loan make sure that there is an existing document that serves an agreement for the both of you so that if the time comes that you can’t repay off your loan there will be no problem between you and the guarantor you will choose.
If you’re wondering whether Amigo loans conduct a credit check to their borrowers and their guarantors or not, then you’ve come to the right place. In this guide, you’ll learn what Amigo Loans is, how guarantor loans, and if these lenders rely on your credit score for approval.
What Is Amigo Loans?
Amigo Loans is one of the United Kingdom’s leading loan providers. They are known for giving a reliable, fast, and convenient service. If you’re looking for a loan guarantor but you’re worried about your credit remark, this loan facility can be your option.
A guarantor loan is a loan that requires another person for approval. This is beneficial for loan borrowers who have a bad credit remark and/or low income. The purpose of this loan is to use the cosigner as a backup in case the primary debtor defaults on the loan.
Almost anyone who knows and trusts you can be your guarantor; however, he/she must have an excellent credit rating and high income to be approved. He/she must also meet the eligibility criteria set by the loan provider.
Will Amigo Loans Do Credit Check?
Amigo Loans do not conduct a credit check to their borrowers. As long as you can provide a stable source of income, your chance of getting approved is high. However, they still have to make sure that you have never filed bankruptcy; otherwise, your loan application may be rejected.
When you use a guarantor to backup your loan application, the lender will also check their financial health. This means that his/her credit check should be clean and has no record of late payments, defaults, and other financial mistakes. Otherwise, his application as your cosigner will also be declined.
Applying for a guarantor loan may be daunting since you also have to worry about your guarantor’s criteria but still, this loan can help you improve your credit remark. After all, a good credit score is important so you can take home a better loan offer next time.