Unsecured loans in 2010, are guarantor loans the future?

Guarantor loans the future for the UK?

After 2 years of abject financial terror the credit crunch is over, and while this is of course a good thing it is now incredibly hard to obtain credit or finance. The high street lenders and banks have made borrowing a lot harder by changing their lending criteria and the amount one can borrow highly restrictive. There are products that buck the trend, products like guarantor loans.

Bad credit

Because times have been hard, you may have had some difficulties maintaining any loan repayments or other credit obligations. This is quite likely to have some bad credit marks on your credit file. However bad things may look there are always options to help people with bad credit or poor credit, or indeed people with no credit history. Typically these may require no credit checks at all.

No Credit Check Guarantor Loans

Guarantor loans are new a simply don’t have any credit checks for the applicant. As a result they enable people with bad credit, people on benefits, the unemployed and people with no credit history get access to credit at a reasonable price. All the borrower needs is someone who will agree to be the security for the loan, pay it back if the borrower fails to. This person is called a guarantor. As they are the security quite often they need to be a homeowner and will be credit checked. While a guarantor loan does seem a bit odd compared to traditional lending in the UK it does give people access to bad credit loans that they would not otherwise have access to.

How does a guarantor loan compare to normal unsecured bad credit loans

A guarantor loan is a type of unsecured loan really designed for people with bad credit although it helps many other groups of people like the unemployed, people on benefits and so on. The common belief that guarantor loans are more expensive than the normal traditional unsecured loans can be easily dismissed because the reality is rates are very comparable. Of course secured loans are cheaper but then they are aimed at a different audience to those with bad credit.