It is possible that you have started counting your losses after a bad credit score. Probably now you are thinking that you will never get any loan facility until your score improves, which may take a while to happen. Yet, you may have had pressing financial needs that necessitates that you get some money somewhere, at least to keep you running. What should you do? Well, there are people who foresaw this problem in advance, and they came up with a product known as guarantor loans.
These kinds of loans are aimed for people who have scored very poorly in their credit score. It is specifically designed to help people who want to realize their dreams, even when they have been marked as risky borrowers. They are only supposed to fulfill few and simple conditions to access the loans. Such conditions include:
- Should be above 18 years of age.
- They should be employed.
- They should have a guarantor.
How Does Guarantor Loan System Work?
The financial institutions lending you the money will need to access the credit score of your guarantor, which must be exceptionally good. From hence, they will offer you a loan facility in which you are supposed to pay a certain amount every month through the guarantor.
Even though you do not have any limitations as to who can be your guarantor, it is important that you look for a friend or a family member who can be trusted, and who understands your financial obligations. Further, through their dedication to see you get back on your feet, you will easily have your credit score improved.
Good companies offering guarantor loans make the whole process easy and hassle free. Some of them are located online, and all you would need to do is to contact them explaining the financial assistance needed. They also have a form available from the websites, where you can easily fill it your details and get the loan without necessarily having to visit them. Better still, you fill in the details and access the loan within the same day.
The Benefits That You Reap
Some of the benefits that you get from these loans are:
- There are no credit checks.
Many financial institutions will always go through your credit scores to determine whether you will get a loan or not. Even when these checks happen, you will still get your loan in the ultimate end, whether your score is bad or ugly
- You have a good chance to boost your credit score
Through your guarantor, you can boost your credit score. The service providers will report of how good you have been scoring, and consequently get other loans from major financial institutions. Still, you will have a very good staring point if you have been stuck will bad loans and would want to have your situation improved.
- You can borrow huge amounts of money
People who have been limited to borrowing small amounts of money due to their poor credit scores can easily have this privilege using their guarantors. If you choose a very high scoring guarantor, most of the financial institutions will use this as the basis, and not your poor credit score.
You must be careful about two things when it comes to accessing loans using guarantors. Firstly, you must make it clear to the potential guarantor how the whole system works. They should never feel burdened at some point, and stop making the necessary payments. You should therefore make agreements on the same and consult with the service providers to ensure that all the terms and conditions are understood.
Second point of caution will majorly concern the company lending the money. Some of them will disappoint you with their rates and poor services. In this light, you must be certain that they are reliable, reputable, legitimate, and friendly in their interest rates and trust worthy. Therefore, you must do your search before you ask any of the service providers.
If you have been stuck with bad credit, you should not worry. All you need to do is to look for a guarantor, and financial institution that offers such facilities to help get back on your feet.