The Loan Guide

Getting a Loan through a Guarantor: What You Need to Know

Getting a loan is not always an easy process. This is because you have to find the right lender who has the terms and conditions you can work with. Besides that, most financial institutions conduct a credit check which disqualifies most people. So if you want an easy way to borrow some money, check out a guarantor loan. While it can be difficult to find a person who will guarantee your loan, you have a better chance than when all you have to rely on is a credit check. To help acquire a guarantor loan here are some tips.


Guarantors work like extra security for the bank. This means that when you default to make payments, the bank will ask the guarantor to make the payments. This means that guaranteeing someone a loan is a big deal. A suitable guarantor for your loan is one who has a good credit rating. Next, you need to understand your obligations. If you have to make monthly payments, make the payments on time. You can even ask your employer or your bank to make the payments on your behalf.


When getting a loan at or through a guarantor, you need to know the related risks as well as the responsibilities. You also need to inform the guarantor of all the risks and responsibilities he or she might have to shoulder on your behalf. Another mistake some people make is applying for their loans  through a broker. Remember that brokers will always include an extra charge for their service. Most banks today allow for their clients to apply for loans through guarantors. If your bank does not have such a service, you can go to a micro-finance institution which will offer you what you need,


As a gesture of good faith, always meet your obligations because the consequences could be devastating your guarantor. This is because when you default to pay, your guarantor's credit rating may also be affected. And if you had a friend or a family member as your guarantor, this may strain your relationship with them. If you own a business or hoping to start one, chances are that you will need long-term and short-term loans every so often. Remember to protect your relationships because failure to do so could give you a hard time securing a loan at next time you need one. More importantly, always take loan amounts to a limit that you will not worry about paying.

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