Traditionally, guarantor loans have required a homeowner to be your guarantor. This is because lending companies felt that homeowners are more reliable as they do not get to move around more often therefore they can be reached with much more ease. However, that is not the case anymore as there are new and enhanced products that allow you to have tenants (non-homeowners) as your guarantor. With a tenant guarantor loan, any family member, friend and colleague who is willing to back you up and meet the loan repayments in the unfortunate scenario that you fail to, is suitable. But, before you go out in search of a tenant guarantor loan, there are a few tips that you must have if you are to land a good deal for yourself.
Know the myths
First, it is important that you understand all the myths that surround tenant guarantor loans. By doing so you will be able to counter them and find a solution. And just like any other industry, it might be hard to tell facts from fiction in some cases.
For instance, guarantor loans may have some bad press for high interest rates. Most people believe that any loan that requires a guarantor must be having ludicrously high rates. However, in many cases these loans are merely understood. Rates differ from one provider to another and tenant guarantor loans are much cheaper when comparing to other sources of lending such as payday loans. Additionally, the amount one can borrow remains to be a contended matter in the industry. And whilst the amount differs from one lender to another, the assumption that tenant guarantor loans only offer small amounts is a myth. You can earn a wholesome amount from a tenant guarantor loan that will go a long way in helping your sort that pressing need.
It will really pay off to do some research before taking out that tenant guarantor loan you want. This is because, like any other finance company, the lending industry is continuously changing as well. However, your research doesn’t have to be a time consuming endeavor. Remember, internet has dramatically evolved and you can easily find a whole lot variety of different providers with a few keystrokes. What’s more, there are so many comparison websites that allow you to choose which lender offers the best terms for your circumstances just with a few taps on your smartphone.
Understand what is needed for this type of loan
It is imperative that you are fully aware of what is expected of you when taking out a tenant guarantor loan. Remember this will help you avoid lots of problem in the future. For instance, it is obvious that you need a guarantor but are you aware of the qualities he/she must possess if your application is to be accepted? In this case, you should also know what role your guarantor is to play. For starters, ensure they have a good credit history. Additionally, let your guarantor know they will be required to cover your loan balance in the unfortunate case you fail to meet your payments.