What is a Loan with a Guarantor?
Have you ever applied for a loan with a guarantor? I haven’t, but I was told one time that I needed one. I was told at other times when I was younger that it might be a good idea for me to get one. The time I was told it was required was when I was in my early 20’s trying to buy a vehicle. When you are looking at loans and realize you need a guarantor, there are some things you need to know.
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Who Would Make a Suitable Guarantor?
First of all, most people are so gracious about the fact that someone says yes that they don’t think much about whether the guarantor is really qualified. You need a responsible and qualified guarantor. Usually, what you hear most is that the guarantor needs to make sure that the applicant is qualified and responsible. However, that’s not the whole picture as you can see.
You do need to examine your finances though and make sure that you’re not going to let down the guarantor. Not only that, but you would be letting yourself and possibly others down if you default on the loan. If you aren’t able to make the payments on time, realize that your guarantor is going to know, even if you continue making the payments overall.
For a little further insight into how guarantor loans actually work – https://en.wikipedia.org/wiki/Unsecured_Guarantor_Loan
Getting Into Good Financial Habits
You’ve got to be on your best financial behaviour, and you still need everything in order when it comes to your personal finances. Just because you have a guarantor doesn’t mean the loan company isn’t going to look at your credit and finances, too. Using a vehicle as an example, that is a big purchase. What about a home?
You’re going to have to make sure that your guarantor knows exactly what is going on. In other words, he or she needs to know what the responsibilities are going to be as guarantor. Some people are willing to sign just to help, but they aren’t completely familiar with what all that entails. What is your guarantor putting on his or her plate?
Working With Your Lender
When choosing this type of loan, you’re going to be choosing a company that can work with you. Therefore, you want to be sure that you’re dealing with one of the best. If you familiarize yourself with the process, get your guarantor up to speed, yet fail to look for the best company, then things might not turn out too well.