Attempting to get credit when your credit rating is damaged has become far more difficult in recent years, particularly since the credit crunch began and lenders are much more wary about who they lend to.
A guarantor loan may be something you may wish to try. A relatively new idea, guarantor loans are appealing to people who have suffered in their personal financial lives, may have previously been made redundant and been blacklisted as their previously good credit rating turned all to quickly in to a bad credit rating.
Guarantor loans can be really useful in repairing your credit rating. The loans themselves are associated with the name of the applicant, rather than the person that is guaranteeing the loan and as the guarantor will have to have a good credit rating in order to act as a guarantor, providing all the payments are maintained, the applicant will benefit from the better credit worthiness of the guarantor.
Guarantor loans are unsecured so that in the unfortunate event that the borrower doesn’t make their payments, the guarantor will not lose their house because of it as the loan is not secured on a property. It should be noted though, that an unsecured debt could turn into a secured debt if the creditor decides to go to court although these measures are usually taken as a last resort when no other arrangement can be made.
Guarantor loans are not generally much more expensive than a normal unsecured loan albeit that unsecured loans as a rule tend to be more expensive than secured loans. The Annual Percentage Rate (APR) of a guarantor loan, may be slightly higher than the normal unsecured APR as the loan is based on the financial status of the person acting for the borrower, rather than the borrower himself.
Almost anybody you know can be your guarantor, so even if you don’t have a relation who could help, you can still ask a friend, workmate or even a neighbour to help you.