Could a Guarantor Loan Clear Your Financial Difficulties?
Posted by : Raj | Posted on : Monday, April 1, 2013
These days, it is almost impossible to find anyone who has never had any financial difficulties. However, finding a good loan is becoming quite hard these days, especially if you don’t exactly have the best of credits. So what are the options? Should you consider going for one of those less trustworthy financial institutions? The answer to that is definitely negative, as there are plenty of better options out there – and guarantor loans are one of them.
What Are They?
Guarantor loans are just like your standard loans – and they have plenty of advantages. First of all, the terms and conditions are usually very competitive. Secondly, the loans are usually very quick, with many institutions giving you a choice of getting the money straight away. And, finally, you can get them even if you have a really bad credit.
There is a catch, however – you will need to get someone to co-sign the loan and become the guarantor. It can be anyone – a friend or a family member, for example. That person will effectively vouch for you, agreeing that he or she will repay the loan in case you fail to do so. Such a person must have an excellent credit history and, sometimes, the lenders also require that person to be a homeowner (as an additional safety measure).
Quite often, the guarantor and the debtor will also sign an indemnity, which is a contract in which the debtor agrees to pay the guarantor for any losses that could be caused by him not being able to settle the original debt.
Of course, guarantor loans come with one big danger that you need to be aware of. The thing is, the problem of getting someone to vouch for you might actually be bigger than you think. The reason for that is the fact that the guarantor is effectively putting his own money and his own credit on the line, which is something that many people – and even many of your very best friends – might easily be uncomfortable with. So, before you even start considering applying for a guarantor loan, make sure that you are completely trustworthy and that you are aware of the risks that such a loan may present to your relationships.
Guarantor Loans Might Be the Solution!
So what is the answer to the original question? Well, the answer is that a guarantor loan could indeed clear your financial difficulties! If you feel that you really are in need of some quick cash from a trustworthy source and if you know somebody who trusts you enough to vouch for you, a guarantor loan might be the ideal solution for your current problems. However, as is the case with all types of loans, you need to be aware of the risks that come with it. Namely, you have to be aware of the fact that you could easily put your personal relationships under a lot of pressure.
Hugh Tyzack is the managing director of GBP Loans ltd, a company that focuses on no fee guarantor loans. You can find more information about that topic on the firm’s main website. When he is not writing for the various online blogs, Hugh likes to enjoy sports and playing the piano. Follow him on Twitter and on Google+.