Banks have become wary about lending money, especially to those who have a less-than-perfect credit history. Guarantor lenders fill the gap between the low-rate bank loans and the very high rate short term (or payday) loans. They offer usually between £2,000 and £12,500 payable over 1 to 5 years. Guarantor lenders offer a new form of borrowing in an old style. They have taken the traditional guarantor aspect (where a friend or family member vouches for your ability to pay the loan instalments) and teamed it with modern lending practices so that you’re able to apply online and have the money in your account on the same day that your application is approved.

Finding the Right Guarantor Lender

As there are more and more new lenders opening for business every year, it’s important that you do some research in order to find the right guarantor lender for you. The way they lend will be much the same, but the interest rates will differ depending on the lender. The cheapest guarantor lender may or may not be the best one for you. Try looking at some independent reviews of the company you’re interested in dealing with online. Other’s experiences will give you a better feeling for the company and help you to pick the best match for your needs. The most important thing to check, however, is that the guarantor lender you’re looking at is registered in the UK, is authorised and regulated by the Financial Conduct Authority. This means that they are a fully registered and legal credit company. You can usually find this information at the bottom of any guarantor lender’s website.

What You’ll Need

When you find the right new guarantor lender for you, you’ll need to do a little preparation before you apply. In order to be approved for a guarantor loan you’ll need a guarantor, which is someone who will back up your loan application. They agree to pay any loan installments which are not paid by you. While the instances of this are rare, it’s important for the applicant and the guarantor to trust each other. A good guarantor lender will ensure that the loan is affordable through fair lending rules. It’s also likely that you and your guarantor will need some form of ID to hand, as you may be asked to scan a copy or send a picture of it to the lender. This helps them to verify who you both are and protect the lender and their customers against fraud. Your ID can be further verified (and you’re more likely to be approved for a loan) if you are registered on the electoral roll for your address.