Non Guarantor Loans
A relatively new type of unsecured loan is the guarantor loan, as with all unsecured loans they do not require the security of a property however they will require a guarantor to support the application and guarantee the monthly repayments should the borrower fail to do so.
The guarantor must be a homeowner, receiving regular income (this can come in the form of benefits or a state/ private pension) and they must have good credit. The guarantor can be anyone who is not financially linked to the applicant (e.g. wife or partner residing in the same property), popular choices as guarantors are friends, family members or work colleagues.
Despite lenders being flexible regarding who can act as a guarantor, some are still unable to find a suitable homeowner guarantor meaning they will turn to Non Guarantor Loans. There are a number of options available to those looking for unsecured non guarantor loans, here’s an overview of each option:
Non Homeowner Guarantor Loans
Much like the normal homeowner guarantor loan, this type of loan does require a guarantor to support the application, the difference being that the guarantor can be a non homeowner or a tenant. Again they must have good credit, be earning in excess of 1000pm and be on the electoral role at their current address. Non homeowner guarantor lenders will offer a 1000 product over the course of 12 to 24 months. Tenant guarantor lenders will look to offer a same day decision regarding the approval of the loan.
A specialist bad credit loan offering amounts ranging from 100 and 1000 over a term of 1 to 12 months. Whilst lenders only offer a small amount, they will still require a number of checks on the applicant due to the absence of a guarantor. The checks involved will be regarding both the affordability of the loan based on income and out-goings and the credit history of the applicant.
A popular new variety of unsecured loan offering between 20 and 400, as the title suggests these are designed to be repaid in full at the borrowers next payday. All payday lenders are web-based meaning their process is 100% online. An automated credit check will be carried out along with a basic income check in order to prove the loan is affordable. Due to the fully online process lenders will be able to offer a 10 minute decision and if everything goes through ok, the money can be transferred into the applicants account within the hour. Read more at payday loans bad credit
Using this overview should give you a good idea of the type of loan you require. Baring in mind the risk to the lender; the tenant guarantor product will have lower interest rates than those of the installment loans. Payday loans will appear to have extremely high rates of APR however this will not be a true representation of the repayments.