A guarantor can be anyone from a family member to a friend or a colleague, who promises to be held responsible for the loan that the borrower is taking. This a third person that helps someone avail of a loan from a bank for whatever reason the person may have. While guarantor loans in UK is by far the easiest and cheapest of loans to avail of, when it comes with a lot of drawbacks for those who are going to be the guarantors.
However, apart from worsening the credit score even more upon defaulting or being unable to pay back the loan, the borrower isn’t under much risk at all. All the responsibility lies with the guarantor. So here’s what you need to know about the dangers of being a guarantor.
The dangers of being a guarantor:
You may have to repay the loan if the borrower fails to do so, as you have signed papers as a guarantor for the borrower. This means that you will be responsible for paying back a loan you did not need or take or use, but the borrower did. And there are very few, if any, ways to get out of such a soup.
Being a guarantor for guarantor loan means that you will not be able to take a loan for something that you may need at the same time and will be required to wait till the loan that you are guarantor for, is paid in full. No bank will give you a loan because you will not be able to afford it. This is because a certain amount of your income will be allotted for the loan of your friend or family member in case things go south.
Over time you never know how relationship with the person may change. Even though you may fall out with the person, you will still be tied to the loan and you will be unable to get out of it. You will still be held to the same contract and will have to pay off the loan even if still aren’t in contact with the person. Even good relationships may get damaged if the borrower fails to pay the loan or if the guarantor is unable to do so.
The other person defaulting will also look bad on your credit file, especially if you are unable to pay back and this will affect all and every future loan that you may think of taking. Your assets, property and also credit score will be at risk, until the entire loan amount is paid off by the borrower.
How can we help?
We know at www.guarantorlender.com help you to find out more regarding this loan. We can assist you; figure out how much of loan can be availed of with your assets. We help you to calculate the amount of guarantor loans in UK that you are able to acquire. With our loan calculator and extensive network of lenders, you will certainly find the best loan settlements.
Short Term Bridging Loans UK—buy property in hard times
You have set your eyes on a dream house that is to be bought immediately otherwise anytime others may grab it. But you don’t have sufficient finance at hand. To generate funds you want to sell your old house but its buyer will take two months to buy it. What to do? Short term bridging loans UK pulls you out of the tight money situations like this one by making available the much-required money the other day.
Short term bridging loans UK, as is clear, is a loan taken for duration of a week to six weeks and a maximum of two years. In these few weeks or days, the borrower after availing the loan buys the new house or any other property from the borrowed money. He then pays back the loan to the lender when he is able to sell the old property.
The amount you can borrow under short term bridging loans UK generally ranges from £25000 to £500000.One can borrow a higher amount provided the collateral placed with the lender is of high value. Under short term bridging loans UK, lenders provide the borrower an amount that is 65 percent of the value of the property put as collateral. The lender when deciding over the loan amount does not consider purchase price of the property. Any property like your home, office or business is worth putting as collateral with the lender when asking him for the bridging loan.
One significant feature of the short term bridging loans UK is that it does not require the borrower to pay any installments. Instead, the borrower pays the interest only during the term of the loan. He then returns the principal borrowed amount when he sells the old property in the said duration.
However, because it is loaned for a very short period, the short term bridging loans come with a slight disadvantage of a high interest rate. The intention of the lender in short term bridging loans remains to earn as much money as possible through the interest. The borrower on his part can make attempts to reduce the interest rate by comparing interest rates of various lenders online.
But considering that the borrower needs the money urgently, he seldom sees a high interest rate on short term bridging loans as a huge burden.
As it is designed to be an instant access to the borrowers, the lenders normally approve short term bridging loans UK within five days of the application. Bad credit score of the borrower will not count much in case of this loan, as the lender has secured his money by taking his property as collateral. Short term bridging loans UK is thus the best available finance to a new property buyer when he faces a tight money situation. But one should make efforts to shop around for a lower interest, which generally remains very high.