The recession has made life much more difficult for those people who want to borrow money and managing your finances is harder than it has ever been as people struggle to find the loan they want – even if it is just to cover a short term financial need. Even extending your bank overdraft is no longer an automatic right – you now have to complete overdraft application forms even if you are only looking to extend it by a few hundred pounds. The simple fact is that access to credit is not as easy as it was pre-credit crunch, when it appeared that every lender and his dog was throwing money at people and if you have an adverse credit history, it is even more difficult. This is why guarantor loans have really come to the fore as a convenient and flexible way of borrowing money, even if your credit profile isn’t great and Whitestar have been at the forefront of this loan revolution and you can find more about us here.
Guarantor loans are a relatively new type of lending product but they allow people with a less than perfect credit history or borrowers who have been declined by high street lenders such as banks and building societies, to apply for a loan and we now arrange tenant guarantor loans too. The most common reason that people apply for guarantor loans is to repay other debts such as payday loans (particularly when people have borrowed more than once and have ‘rolled over’ their loans). A guarantor is required to support every loan application and this can be a family member such as a sister, brother, auntie, uncle or cousin as well as mum, dad or a friend. By endorsing the borrowers application, the guarantor is bound to make the monthly repayments if the borrower cannot or will not do so. If you do get refused by a loan company then take a look at the 5 reasons why you may never get offered a loan here.
Whitestar guarantor loans allow you to borrow from £1,000 – £10,000 and you can take the loan over anything from 1 to 7 years, which means you have complete flexibility when working your finances out (which is important because we do take affordability into account). It is important that you get this part right at the outset because it is difficult to change once you have agreed on the loan amount and term and whilst spreading the your loan over a longer term will help to reduce the monthly repayment, it could cost you more in total over the full term.
Well apart from the obvious reason of allowing individuals with a poor credit history to get a loan when all other avenues appear closed, the main reason is that these types of loans offer the lender far greater security; in other words, the lender has more chance of getting their loan repaid by the borrower because there is someone else attached to the loan. It is also because we are still reeling from the aftershock of the 2007 credit crunch because even some 6 years later, the cataclysmic effects of the recession still linger on and many new lenders who have thought about entering the UK lending sector have decided against this and who can blame them? What the recession has done (apart from make lending money even harder) is to push many people into debt which is why we are seeing even greater numbers of people suffer from an adverse credit history and as we all know, trying to borrow money or take out new credit is extremely difficult if you have current or historic adverse credit problems. This is why guarantor lending has really taken off in the last few years.
The guarantor can be aged from 18 to 80 and can be a homeowner or a tenant. Bear in mind that you will be liable for the loan repayments if the borrower doesn’t make them each month, so you need to totally comfortable that you:
Know the borrower well enough to have a conversation with them if they don’t pay for any reason
You can comfortably afford the loan repayments if the need arises for you to step in
However, it is also worth noting that as part of the new FCA affordability requirements for guarantor lending and unsecured loans in general, we will assess both the borrower and the guarantor to ensure that they can afford the quoted monthly loan repayments. It is also important that you make your guarantor fully aware of their responsibilities in relation to the loan, both from a legal and financial standpoint.
whitestarloans.co.uk is fully committed to responsible lending which is why we undertake our own income and affordability checks, even before your guarantor loan application reaches any of our lenders and by doing it this way, not only will you have a greater choice of lenders to choose from but you will also avoid wasting your time as we can tell you immediately if a lender would accept your application or not and you will avoid any unnecessary credit checks. Our team will assess the specific circumstances of every potential borrower to ensure they meet this criteria and move towards a swift conclusion so their loan can be paid out as soon as possible.
No. There was a time when we had to contact both the applicant and guarantor at work but not anymore as all of the lenders that Whitestar deals with do everything online now, including ID, income, address verification and even signing the application forms. This saves a lot of embarrassment and undue stress, particularly from the guarantor’s perspective as they simply helping the applicant out, not actually applying for the loan themselves – so there is less need for them to do something which makes them feel uncomfortable and contacting them at work definitely fell into this category.
All of the lenders we deal with use the services of credit reference agencies such as Experian, Call Credit or Equifax and will use their automated credit checking process to assess a loan application but PLEASE DON’T WORRY, this does not mean that you will undergo a credit score because lots of lenders will only credit search the guarantor and won’t use a credit score on either the borrower or the guarantor to make their lending decision. Every lender has their own set of lending criteria so whilst it may sound like a good idea, you can’t ‘game’ the system to get your guarantor loan approved because every single lender will take into account your employment status, age and of course, other loans and credit that you may have taken out in the past or are still currently outstanding.
At Whitestar Loans, we are serious about responsible lending and will always make sure that every lender we deal with adheres to our principles too. All borrowers looking to take out a guarantor loan via ourselves will have to meet the following criteria:
· Minimum 18 years of age
· Resident in England, Scotland or Wales
· Currently receiving income in the form of a salary (employed or self employed) or private pension income
· Provide a guarantor who has good credit BUT can be a homeowner or a tenant
It is quite simple. You apply online and as soon as we receive your online enquiry, we get working on your case immediately. The guarantor will be credit scored and the applicant will have their address credentials checked online. The credit score determines how much the applicant can borrow and in many cases it won’t be a no but it may be that your original application of £10,000 is reduced to £8,000 but conversely it could also mean that someone who applies for £5,000 may be approved for £7,000 so it all depends. Once the application is approved, the money will be paid into the guarantor’s bank account (not the borrower’s) as this is an important part of the anti-fraud process and ensures the guarantor’s personal details have not been compromised. We can normally give you a very quick decision on your loan application, usually within 10 minutes of you applying online.
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk
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