The rising rate of inflation has meant that people all over the UK are finding it hard to make both ends meet. This is the reason why there has been a rapid increase in the demand of loans. People are taking loans from banks and other financial institutions to pay off their daily expenses. However, this much borrowing means that people find it extremely hard to repay the loan and end up defaulting. Such people get a low credit score and find it almost impossible to take loans from banks. Guarantor loans in the UK offer some respite for such people. The following are some of the reasons why applying for a guarantor loan is a good option for you in the current financial circumstances.
Credit Score Doesn’t Matter
The best and the most telling advantage that a guarantor loan can offer you is that it doesn’t require you to have a good credit score. Guarantor loans are designed especially for people who have a bad credit history and are unable to get loans from a bank. When applying for a UK guarantor loan, your credit history isn’t checked and instead the person who is willing to be your guarantor will have his credit score checked by the lender. Thus, if you have a bad credit score but have a friend or family member who is ready to be your guarantor then getting a guarantor loan is the best option available to you.
Low Interest Rates
Guarantor loan is a kind of unsecured loan and such loans usually have a very high interest rate. However, guarantor loans do not have a high interest rate. Since these loans require you to provide a guarantor who will be responsible for repaying the loan if you end up defaulting therefore the lender feels relatively safe and thus offers the loan to you at a considerably lower interest rate than other unsecured loans. So, if you are looking for an unsecured loan that does not have a high interest rate then guarantor loan is the best choice you have.
Improvement in Credit Score
Another great advantage that guarantor loans have to offer is that they can help you in improving your credit score. If you ensure the repayment of the guarantor loan in a timely fashion then it will have a positive effect on your credit score. This will allow you to apply for bank loans that are available for a far lesser interest rate.
Variety of Options
There are a number of companies that are offering guarantor loans in the UK. You can easily find specialist guarantor loan companies on the internet. The most prominent company in the industry is LoansWithGuarantor.net So, you have plenty of options at your disposable. You can compare the interest rates offered by each company and then decide which one of them is offering the best deal to you.
Aside from these benefits, the guarantor loans don’t require much processing time so you can get the money you need in a very quick time. If your guarantor has a high credit score then your guarantor loan will be approved instantly.