Who can be a Guarantor?
Guarantor loans are an unsecured type of loan. In this loan there is no collateral you can secure the loan against. This type of loan needs a guarantor who will guarantee that the borrower can pay the loan he or she wishes to borrow. The guarantor will be the fall back in case the borrower fails to do his or her obligations to repay back the loan borrowed. A guarantor can be anyone you can think of. However, this guarantor must know all the things he or she needs to know when you make them as guarantor. The guarantor must know the consequences of being a guarantor are.
First a guarantor must have good credit rating performance. Although a borrower can have bad credit rating, lending companies require the guarantor to have a good credit standing so that in case the borrower fails to do the repayment, the company can be sure that the fallback can repay what the borrower failed to do so.
Also, to be a guarantor, you must be at least 25 years old. The need for having a UK Bank account or debit card is a must and most importantly, the guarantor must be a UK resident. This is important so that the files are updated and the contact numbers are easily contacted in case there may be actions to do with regards to the guarantor. Another thing is that the guarantor should be less than 65 years of age. The guarantor to act must be employed, self- employed, or even retired. You can be retired just as long as there is a proof of income or anything that can show that the guarantor can repay the payments needed to be done. The residence is equally important as well because both the borrower and the guarantor must be from UK to be considered in the application process.
Being a guarantor can be a great help for those people who badly need financial assistance immediately. It is a great cause to help a friend too. When wanting to become a guarantor, one must be fully aware of the responsibilities that being a guarantor entails. When you become a guarantor you will receive an email containing an application form and a guarantor loan agreement. You will need to sign these forms and you must allow getting credits checked to ensure that you have a good credit rating, which is a requirement for a guarantor to be. This because you need to be able to afford the repayments in case the borrower fails to do it. As a guarantor, you must be responsible as well. Although your presence will not be as big if there is no problem with the borrower in repaying their loan, but you need to know and ensure that the borrower pays the loan in the right scheduled time so that you will not have to get in charge of any case that may occur when it comes to mishandling of repayments.