A guarantor loan can provide you urgent finance if you are an individual with no credit history or a low credit score. You can apply for an unsecured loan that is to be paid back by fixed monthly EMIs. Such loans are guaranteed by someone you know, and they know your character extremely well.
Guarantor on loan – Eligibility
A guarantor is nominated by the borrower. The guarantor of a loan agrees that they will repay the loan in case of mishaps to the borrower’s repayment capability. The guarantee can be for the repayment of a part of the full loan in case of default. The guarantor can commit their assets to guarantee the loan.
- The age should be 21 years.
- Must have a sound credit history
- Must have the minimum income as per lender’s terms
- Should have a permanent address
- the lender should be convinced of the guarantor’s repayment ability.
Bad Credit Loans with Guarantor
Any individual whom the borrower trusts and who meets the loan provider’s requirements can be a guarantor.
It is most important that the guarantor should have trust in the applicant that they will take responsibility for their loan and do everything to their level best to repay the loan on time. And the borrower should trust the guarantor to act if there are chances of delayed repayment.
Therefore, typically most borrowers get a guarantor from their family member or friends next to the family who knows the borrower well and understands their financial situation.
Life partner as Guarantor in loans
A life partner can be a guarantor. Lending institutions look at separate finances or a bank account of the guarantor.
Make sure you are open about your finances to the guarantor as well as the lender and tell them why your loan application has been rejected in the past. Reveal the end-use purpose of the borrowed money. Explain to the guarantor how you mean to make the timely repayments as they are helping you to increase your credit score by a guarantor loan.