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Welcome to Compare Guarantor Loans

Compare, Select, Apply – Simple!

Guarantor loans are rapidly becoming a mainstream unsecured borrowing option in the UK. New lenders are arriving in the market at an ever increasing pace. However, the provision of information about guarantor loans and the lenders who operate in the market is limited. It’s become obvious that what is needed is a dedicated website to help consumers understand what guarantor loans are and compare lenders in the market. That is why we have launched Compare-Guarantor-Loans.co.uk - it’s the best way to compare guarantor loans.

How Can Compare Guarantor Loans Help You?

We’ve built the website around the things that you are most likely to want to know or do when looking for a guarantor loan:

  • Comparison Tables (£50 to £500 & £500 to £10,000) of the major lenders that quickly explain the benefits and highlight the differences. We also include lender ratings from our customers & their most recent reviews – find this information on the lender pages accessible from these tables.

    Our comprehensive comparison tables for guarantor loans

    Use our comparison tables to compare guarantor loan lenders

  • Blog & Discussion Forum that enable you to dig deeper into guarantor loans and the reputation of individual lenders
  • Application Process that allows you to select lenders you’d like to apply to simultaneously through one form (£50 to £500 & £500 to £10,000)
  • Instant Lending decisions – our live links with lenders mean we can give you instant in principle lending decisions.
  • Fast E-Signature Service – some lenders provide an e-signature service meaning there is the option of an extremely fast conclusion to your application process. It is possible to get up to £500 in 1 hour, and up to £5000 in 24 hours.

If you think you need other information to allow you to compare guarantor loans then let us know what it is and we’ll see what we can do.

Our Range of Information Resources

  • Our Blog – we will be regularly writing about the guarantor loan market in the UK focusing in particular on developments driven by lenders. You can add your comments too.
  • Our Forum – a great place to hang out and find out what questions and opinions people have about guarantor loans. May be you have a question you’d like to post, or indeed may be you have an answer for someone else’s question.
  • Our Information Videos – we’ve created a series of videos that explain aspects of guarantor loans.
  • Our FAQs – may be what you need is here. And if you can’t find it try the search function within our forum area.
  • Our Guide to Guarantor Loans – a downloadable document that covers much of what you’ll need to know.

We’re pretty sure that you’ll be able to compare guarantor loans a lot more easily with this information to hand. You’re in exactly the right place to find out everything you need to know about guarantor loans.

Reviews of Compare-Guarantor-Loans.co.uk

Since we launched we’ve been receiving the sort of feedback that we could only have dreamed of. People love our information resources, the ability to apply to multiple lenders simultaneously while only having to complete one form, and the instant lender responses.

Since we launched Compare-Guarantor-Loans.co.uk has scored 4.5 out of 5 based on 143 ratings & user reviews.

 

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UK Trust Loans join UK guarantor loan market with £3000 offering

If you need a guarantor loan of £1500 to £3000 for 12 to 36 months then you have yet another guarantor lender to consider. UK Trust Loans Ltd has entered the market and are making a strong pitch as a truly “responsible lender”. They genuinely don’t want you to take on debt if this will simply cause you financial hardship down the line.

Giving you a helping hand and taking responsible lending seriously

Only time will tell if they can live up to their promises, but it seems sensible to give them the benefit of the doubt. There are plenty of lenders now who offer loans in the range that UK Trust Loans do so it’s worth looking at all the alternatives before you decide who to apply to. Check out our comparison page now for alternative lenders.

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GuarantorUs Loans bring unsecured lending out of the dark ages

Oakbrook Finance Ltd, whose consumer finance business has grown through point of sale finance, has recently launched GuarantorUs Loans to compete in the rapidly growing UK guarantor loans market. GuarantorUs Loans offers between £1000 and £5000 for periods of 12 to 60 months. Other guarantor lenders do offer larger amounts over longer periods but its APR of 45% is the leading rate in the guarantor loan sector.

Not the dinosaur lender you might imagine them to be

They have clearly spent a lot of time perfecting their website and we expect GuarantorUs Loans to be a strong player in this market. As ever it makes sense to compare their offering with those of their competitors so check out our comparison pages now!

 

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Buddy Loans launches guarantor loans with a £7500 maximum

Buddy Loans has joined the rapidly growing UK guarantor loans market and is offering loans of up to £7500. Its loans are a little more expensive than Amigo’s with a representative APR of 54.4% – in fact this makes it more expensive than most guarantor loans lenders currently in the market.

Arriving in the market with a “Bang!”

In spite of this rate disadvantage it sounds like Buddy Loans is intending to arrive in the market with a bang rather than a whimper, so expect to see TV advertising soon.

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TFS Loans now lending to BT postcodes

TFS Loans has announced that it is now offering guarantor loans in Northern Ireland.

TFS Loans logo

If you live in a BT postcode TFS Loans are now able to lend to you.

This means that if you live in a BT postcode you now have access to unsecured loans with these general terms:

  • £1,000 to £10,000 unsecured even if you have a poor credit history
  • Spread your loan repayments over any period between 24 and 72 months
  • Full online e-signature service meaning it is possible to complete your loan application and get your cash in as little time as 24 hours
  • Representative APR of 48.8%

UK Credit also offer guarantor loans to BT post codes in Northern Ireland. You can quickly find out if TFS Loans and UK Credit will lend to you in principle by selecting them from our list of lenders and submitting some brief information to them via our online enquiry service. In 60 seconds you’ll have the answer you need.

 

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How to choose a guarantor for your loan

For many people getting a loan can be difficult, especially if you have a bad credit history or no credit history at all. However, there are a range of lending choices available to you.

One increasingly popular solution is a ‘guarantor loan’. Instead of being credit scored, you provide a ‘guarantor’ for the loan who agrees to make your payments if you don’t. But, what is a guarantor? What are their responsibilities? And how do you choose a guarantor for your loan? Keep reading for the answers to these questions and more.

What is a guarantor?

When you apply for a guarantor loan the loan is in your name and your credit record will show your payments. However, to be approved for the loan you will need to provide a guarantor.

Being a Guarantor

A guarantor is someone who agrees to pay the loan back if you can’t. Instead of checking your credit history

A guarantor is not a new idea. For years, many mortgages have required guarantors and it was the way many loans worked before the introduction of computerised credit scoring; the lender takes the view that your guarantor trusts you to make the payments, and therefore so does the lender.

What are a guarantor’s responsibilities?

Your guarantor effectively promises to make the loan repayments if you don’t pay.

If you fail to make a payment it becomes the guarantor’s responsibility to keep up the payments until the loan is repaid. This is why the guarantor needs to be able to afford the repayments as well as their own commitments (more later).

Criteria for a guarantor

The criteria for the guarantor depend on the size of the loan required and the individual requirements of a lender. However, to be a guarantor the person must typically:

  • Be able to afford to make repayments if you don’t pay
  • Be aged between 18 and 75
  • Have a good credit history
  • Be a UK homeowner – it doesn’t matter f they own their home outright or if they have a mortgage

For smaller loans (typically under £500) the guarantor doesn’t have to be a homeowner – they can be renting, living with friends or indeed living with other members of their family.

The guarantor will have to pay the loan back if you can’t. This means that it is important that they can afford the monthly payments as well as having enough money to meet their own financial commitments.

Finding the right guarantor

In theory, anyone who fits the above criteria can be the guarantor for your loan. This means you can choose:

  • A friend
  • A family member
  • A colleague
  • Your landlord
  • Your employer

In reality, the guarantor is often someone that you know very well. That is because they know and trust you the most. They are also best placed to determine whether you are likely to keep up the repayments to your loan. If you don’t, of course, they become liable for your debt.

Most people look to members of their close family (parents, a brother or sister, a grandparent or perhaps an aunt or uncle) in the first instance. There is no issue with your guarantor sharing the same surname as you.

After this, most people then turn to a very good friend or perhaps a work colleague. You may also consider asking your employer or landlord if you know them very well.

When choosing your guarantor it is worth thinking carefully about who you ask. By entering into this agreement you may jeopardise your relationship if you do end up not maintaining your repayments.

Similarly, it is important that you don’t apply for money you know you can’t repay as you will be exposing your guarantor to a significant risk and this may put a huge strain on your relationship. Stepping in to make your payments could affect your guarantor’s own financial security and so if you think this could be an issue then it may be best to avoid borrowing or to consider another guarantor.

One simple way to think about a possible guarantor is to consider whether you think they would be happy to lend money to you themselves. If the answer is ‘yes’, they will probably also be prepared to guarantee your loan.

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Are guarantor loans safer than payday loans?

You may be a little confused over the differences between guarantor loans and payday loans. At Compare Guarantor Loans we regularly hear questions on this subject and here are some hopefully helpful responses.

What are guarantor loans?

These are an innovative product aimed specifically at providing finance of £50-£10,000 to borrowers without the need for security or credit scoring checks.

The basic idea is extremely simple.  If someone such as a family member, close friend or business colleague is willing to guarantee your borrowing in the event you are unable to keep repaying the loan, then that will give increased confidence to lenders.

That in turn means they may not require the same degree of comfort about your own personal financial position as would be the case with a conventional unsecured loan.

What can these loans be used for?

Anything you wish!

They may be particularly suitable for purposes such as paying off expensive credit card balances and replacing the debt with lower-cost of borrowing finance.

How do these differ from payday loans?

Payday loans are typically for smaller sums of money lent over very short time periods of, at least theoretically, a few days or perhaps weeks. The sum you have borrowed needs to be repaid in total by a specified date.

If you fail to meet the agreed repayment date, punitive additional charges might be incurred in some circumstances and the accumulating interest costs can be extremely high.

The costs and risks associated with such borrowing have been the subject of recent political debate and legislative discussion. They have become a matter of public concern and recent surveys indicate that the numbers of people considering using payday loans has halved over recent times. Now only six per cent of people polled are saying they would consider using one.

By contrast, guarantor loans are conventional in the way that the sum borrowed is repaid over an agreed period of time by instalments. Of course, as with any form of borrowing, you should be clear that you understand the interest rates offered by different lenders and what that will mean in terms of repayments. You should also be sure that you will be capable of repaying the loan in line with your agreement.

Will I need to be credit scored to get a guarantor loan?

Typically, no, you will not be credit scored.

As your guarantor will be showing that they trust you to the extent that they are willing to share the risk with the lender concerned, you may not need to demonstrate your creditworthiness to the same extent as would be required by other forms of lending or payday loans.

What sort of security will I need to offer to obtain a loan?

None. In a sense, your guarantor is your security.

How much can I borrow?

The maximum amount available through guarantor loans is typically around £10,000

The amount you may be able to borrow in a given situation may vary significantly depending upon the individual lender concerned and their perception of your / your guarantor’s ability to be able to maintain the monthly repayments.

The lender will be operating under strict responsible lending guidelines and will be keen to help you ensure that you are not borrowing more than you can realistically afford to repay.

What interest rates are payable with guarantor loans?

That will vary depending upon the lender concerned and it will, of course, form part of your eventual selection and decision. Typically, these loans work out more cost-effective than payday loans – either over a period of days, weeks or indeed months.

How quickly will I be able to obtain a guarantor loan?

For smaller sums, you may be able to gain access to a decision and the money within a matter of an hour or so.

The case of larger sums, the lenders may require a little more information on aspects of the guarantor’s financial position and that may, therefore, take a little more time.

Even so, the process is normally fast and simple.

What happens if I am unable to meet a repayment?

It is always considered professional and responsible behaviour to notify your lender, in advance, that you have a potential short-term problem. They understand that sometimes these things happen.

In such cases, typically arrangements can be made without a problem though some charges may apply.

If you are consistently unwilling or unable to maintain payments then the lender may need to contact your guarantor.

Are there age limits that apply?

Yes, depending upon the sum you are looking to borrow. They may apply to both the borrower and guarantor.

For example, by law the minimum age for entering into a legal commitment is 18. For larger sums, the guarantor may need to be over 23 and a homeowner.

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The Magnificent Seven Benefits of a Guarantor Loan

Guarantor loans are changing the way that thousands of people borrow money. Instead of a bank, building society or credit union deciding whether you are a suitable risk, a guarantor loan is based on the trust of someone you know.

Instead of a computer making a lending decision, a guarantor loan lets you borrow if you have a friend, colleague or family member who trusts you enough to guarantee that you’ll keep up your repayments.

There are lots of reasons why more and more people are turning to guarantor loans to borrow the cash that they need. Our guide looks at seven of the main benefits of a guarantor loan.7 Benefits Guarantor Loans

1. You’re not credit scored

If you approach a bank or building society for a loan they will almost always use a credit score to determine whether they will agree your borrowing. This involves accessing your credit file – the record of what credit you have and how you manage it.

If you have missed a payment on a loan or a credit card or you have any adverse credit – County Court Judgements, for example – it is unlikely that a traditional lender will agree your loan.

Even if have no adverse credit it can still be hard to get a loan, particularly if you have never had a credit card or loan before.

When you apply for a guarantor loan, you are not credit scored. The lender will not access your credit file, meaning you won’t be declined if you’ve had a credit issue in the past. Instead, you provide a guarantor for your loan. This person trusts you enough that they believe you will keep up your repayments, and they are legally obliged to pay back your loan if you default.

2. A guarantor loan is flexible

The repayment terms for guarantor loans differ from lender to lender. However, with most loans you pay interest on a daily basis and there are no early repayment fees.

This means that if you decide to pay back the loan early, you can reduce the total interest cost. You won’t be penalised for doing this and you’ll only pay back interest to the day that you repaid the loan – not until the scheduled end of the agreement.

3. Your loan is not secured on an asset

A secured loan means that your borrowing is linked to an asset such as your home or your car. If you fail to keep up your repayments the lender can seek to repossess the asset you used to secure the loan.

Guarantor loans are ‘unsecured’ loans. This means that you do not risk losing any of your assets if you have repayment problems.

4. No upfront fees

When you apply for a guarantor loan you won’t pay any upfront fees or charges. And, you can typically agree your loan in principle with no obligation to proceed.

5. You can apply online

Loans with a guarantor are easy and quick to arrange. You can use an online comparison site to find the right loan for you and then most lenders let you apply online.

You and your guarantor can also often digitally sign the agreements (so called ‘e-signatures’) to make the process even easier.

6. You could get your money within an hour

If you need your money quickly then a guarantor loan can be perfect. Smaller loans of up to £500 can often be obtained within 1 hour. If you want a larger sum – typically up to £10,000 – you can normally have your money in your account in 24 hours.

If you don’t have a guarantor lined up then it can delay the process. So, it does help if you have found your guarantor when you make your loan application.

7. You’ll pay a competitive interest rate

If you’re struggling to get a loan through a mainstream lender then you may have considered other alternatives. However, the interest rates on ‘credit repair’ products such as credit cards and loans can be extremely high. Payday loans charge an even higher rate of interest.

As you are providing a guarantor, the interest rate on this type of loan is often extremely competitive when compared to alternative products. And, with no fees and the ability to repay the loan early you can save a considerable sum.

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Do you need to borrow up to £10,000 but the bank won’t help you?

It can be extremely frustrating to find yourself in the position of having an urgent requirement for a bank loan but simply cannot find one willing to lend you money.

Here is a quick overview of why that might be the case and more importantly, how we at Compare Guarantor Loans might be able to help you to find guarantor loans to deal with your requirements.

Why won’t banks lend money?

Over recent years there has been much debate about the banks’ lending policies.Borrow £10000

While there is no doubt that the various global financial crises have introduced an increased note of caution into the banks’ considerations of loan applications, even so, certain basics remain constant.

Whether a bank will lend money or not is driven in large part by their perceptions of the risks involved in doing so.  If they believe that there is a significant chance of them not being able to get back the money they are being asked to advance then they are likely to reject the loan application.

So, anything you do to improve a bank’s view of the risks of lending to you, then the more likely you are to be able to obtain a conventional bank loan.

How do banks assess risk?

There is no single answer to this as they will typically look at a number of different factors including:

  • your credit history;
  • whether or not you can offer security against the loan (i.e. an asset they might be able to seize in the event you default on repayment);
  • your income and existing income/debt ratio etc.

The dilemma for many potential borrowers is that their credit history may be less than exemplary due to factors they may have had little or no control over (e.g. debt problems arising from past redundancy).

Even if these problems are years in the past, it can take a long time for them to disappear from your credit history. In the meantime, they may prove to be a showstopper for many conventional bank loans – particularly if you are also unable to offer security such as your property to support your application, or are self-employed with less than three years’ worth of book keeping.

Why guarantor loans are different

In the case of a guarantor loan, the lender typically won’t require a credit scoring exercise on the applicant nor will they ask for any security.

That does not mean they are more cavalier with their lending – only that they have simply found a way around the potentially irreconcilable problem of poor credit histories by the use of what is called a guarantor.

In very basic terms, here is how it typically works:

  • the loan applicant finds someone, perhaps typically a close relative or friend, who will be willing to guarantee the loan on their behalf;
  • what that means is that they will commit to maintaining repayments on the loan in the event that you are unable to do so for whatever reason;
  • so, as a potential lender has someone offering to guarantee your borrowing, they wouldn’t need to perform a credit history check or ask you for security by way of a major asset.

It’s quick, simple and easy. You can actually watch a brief video overview of the process here.

Responsible borrowing

Of course, before entering into any form of borrowing you should be confident of your ability to maintain the repayments concerned.

In that respect, you might consider it prudent to consider things such as various forms of income insurance to cover your loan repayments and other expenses in the event you were too sick or otherwise unable to work etc.

Fixing your credit history

Unfortunately, in spite of what you may see some organisations claiming to be capable of, in reality there is little or nothing you can do to immediately fix a poor credit history.

There are certain steps you can take to help address your credit rating scores but they are typically activities required over time and not a single press-button and solve everything solution. Part of that will be you showing that you are capable of entering into financial arrangements and bringing them to a satisfactory conclusion.

As such, given that rejected bank loans will be reflected on your credit history files, it might be worth seriously considering whether it is wise to continue to apply for conventional bank loans that you may be unlikely to be successful in achieving.

By contrast, showing that you have entered into and successfully paid off a guarantor loan may have a positive effect on your credit scoring in future.

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Bad credit. Why you should consider a guarantor loan

Since the global financial crisis it has been tough to get approval for a personal loan. Financial institutions from banks to supermarkets have tightened their lending criteria and millions of consumers have seen their loan applications declined.

One of the most common reasons to have your application turned down is because you have bad credit. And, in the current climate, bad credit doesn’t necessarily mean being bankrupt or having a County Court Judgement: it can be something as minor as a missed payment on a credit card or going over your bank overdraft limit.A bad credit loan can help improve your credit score

However, if you do have bad credit there is an avenue open to you. Guarantor loans are ideal for people with adverse credit as they don’t involve a credit score. Keep reading to find out more about how these ‘bad credit loans’ could work for you.

What is bad credit?

Your credit file is a record of all the credit you have had and how you have managed it. There are three credit reference agencies in the UK – Equifax, Experian and Call Credit – and they hold information about how you’ve managed all sorts of financial responsibilities from a mobile phone contract to a mortgage.

‘Bad credit’ can mean many things. It typically means that there is some adverse information on your credit file. It can be relatively minor, such as a late payment on a credit card or you may have gone overdrawn for a short time. At the other end of the spectrum ‘bad credit’ can mean more serious issues such as loan defaults, County Court Judgements or even bankruptcy.

Why bad credit will stop you getting a loan from a mainstream lender

When you apply for a loan from a bank or building society, the lender will use a process called ‘credit scoring’. This is made up of two parts:

  • Accessing your credit file – the lender will request your credit file from one of the credit reference agencies to establish how you have managed credit in the past
  • A credit score – the lender will use their in-house ‘credit scoring’ process to determine whether you meet their required criteria for a loan

If there is adverse credit information on your file there is a strong chance that you will fail to ‘score’ highly enough to reach the lender’s benchmark. While many other factors are taken into account when determining whether the borrowing will be agreed, bad credit is a major negative factor for most lenders.

Why guarantor loans are the answer

A guarantor loan is different to a traditional unsecured loan because the lender will not access your credit file and will not credit score your application.

Instead, you provide a ‘guarantor’ for the loan. This is typically a friend, colleague or family member. The guarantor is someone who trusts you to make your loan repayments to the extent that they are prepared to legally underpin the loan. Your guarantor effectively becomes responsible for your loan if you fail to keep up your repayments.

Instead of credit scoring your application, the lender takes the word and commitment of the guarantor as the basis for the lending. Your guarantor may be subject to credit checks and for larger loans they will have to be a homeowner.

When you apply for a guarantor (or ‘bad credit’) loan you won’t be refused simply because you have adverse credit or because you fail a lender’s credit score.

Bad credit loans can also help you to repair your credit rating

A further advantage of a guarantor loan is that it can actually help you to repair your credit rating and make it more likely that you will be approved for a loan in future.

When you make your guarantor loan repayments every month the lender will report this information to the three credit reference agencies. Over time, your credit file will show that you have made all your regular payments on time. This will demonstrate to lenders that you are capable of managing credit responsibly and it will improve your chances of getting further credit in the future.

It is important to remember that no information is reported back to credit reference agencies for guarantors, even if payments are missed, unless the account goes to court.

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TFS Loans loosen guarantor loan terms

In attempt to broaden the appeal of guarantor loans TFS Loans have relaxed some of the criteria they use to assess applications. Their loan product is now available to a wider range of individuals. Perhaps it would suit you too.

TFS Loans logo

TFS Loans have relaxed the criteria for their loans

The main TFS Loans changes are as follows:

  • The maximum loan available to non-homeowners has been raised to £7500
  • Guarantors can now be self-employed regardless of loan amount
  • Partners will now be considered as an applicant’s guarantor
  • There is no longer a minimum employment period for the applicant
  • An applicant’s minimum income has been reduced from £600 per month to £400 per month.

TFS Loans expect these changes to significantly raise interest in their range of guarantor loans. As ever, TFS Loans reserve the right to decline any application if it does not meet the requirements of their responsible lending policies.

Compare TFS Loans to Other Lenders here.

 

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