What is a guarantor loan?
A guarantor loan is a loan that requires someone else to guarantee the loan for you. This means that if for any reason you are unable to make your loan repayments, your guarantor will be obliged to make them on your behalf.
What are the disadvantages of a guarantor loan?
The main issue with a guarantor loan is that you have to get another person involved in your loan process. Not only do they need to be willing to help you, but they will also have to undergo a credit check to demonstrate to the lender that they would be able to afford to take on your loan repayments if you were unable to keep making them.
So it could be difficult to find someone willing to do this, and it could also be very embarrassing if you end up having to let them take over the loan for you.
Are there other ways I could get a loan with the help of another person?
Yes. Another option is to take out a joint loan, for example with your spouse or partner.
This means that the loan would be in both your names and you would both sign it. By doing this you each agree to continue to make loan repayments if the other is unable to do so.
In practice this works well for most people. You both benefit from the loan, and both contribute to paying it off. You may also be able to borrow more money if you need to than one of you applying for the loan individually. This is because you will have more income, and perhaps a stronger credit history, than just one of you on your own.
What kind of joint loans do you offer?
Our Advantage loan is available to either individual or joint applicants. You can borrow between £250-£2000, and there are no set up fees or any other hidden costs. You can repay your loan over a period of 24 months by monthly, fortnightly or weekly instalments; and if you want to repay it early we won’t charge you for doing so.