Monthly Archives: November 2018

How To Get Loans With Guarantor Non-Homeowner?

Modern banking systems provide a large scale of credit options that vary extremely in the total amounts of landed money, as well as in terms of credit use and repayment. Most lenders will allow you required an amount of money if they are convinced that you are capable of repaying it or if you have provided ways for lenders to get repayment in other ways aside your profit. Most loans are secured with your or your guarantor’s property. With the increased number of people not possessing their own homes, clients frequently ask about the options to get loans with guarantor non-homeowner.

Basics of unsecured loans

Roughly divided, there are two types of loan you can apply to. The so-called “secured” loans are usually granted for huge amounts of money and this type of credit imposes some strict terms. If submitting an application for the secured loan, you have to be a homeowner, your guarantor has to be a homeowner too, there shouldn’t be traces of bad credit loans history in your record and the lender will provide you with 7500$ or more. These criteria are becoming hard to meet for too many people and the non-homeowners are put in an unfair position. Just because a borrower doesn’t possess a property or real estate, it doesn’t have to mean he won’t repay the debt timely using only regular income. Realizing this, some lenders are offering “unsecured” loans that entitle non-homeowners to credits too. The basic idea is that non-homeowner guarantor loan doesn’t require you or your guarantor to possess any property when applying for a loan.

Criteria for non-homeowner loans

Since unsecured loans aim to provide people without property with the same chances and opportunities as homeowners, relying on their responsibility to repay it back in the stipulated time frame, the basic idea is the same. You will submit the application, require a certain amount of money, provide the contract in which your guarantor accepts to come first and pay off your debt if you fail to do so and the rest is up to the lender. However, the benefit of the unsecured loans is that neither you or your guarantor need to possess property. This loan is approved to tenants or people still living with their family or friends as well. This loan system, also, allows you to apply for the money even with a bad credit loans history.

Cons of loans with guarantor non-homeowner

This loan model is created by lenders to allow non-homeowners to participate in the credit system without mortgages or other legislative manners of securing the loan, which makes it the perfect opportunity for those who are at the beginning of financial development. The major downside is the limited amount of money. Non-homeowners are allowed to apply for loans up to 7500$, providing only proofs of their and their guarantor’s regular income. There is no age limitation, as long as you are over 18 and your credit history is clean.

What is the Guarantor’s Responsibility?

When applying for most types of loans, with an exception of some bad credit loans, lenders will require you to find guarantor to co-sign the contract and accept guarantor responsibility. These responsibilities vary depending on the loan you choose, but in each case guarantor is a lender’s way of securing lent money. The chances are you will need a solid guarantor and he will have to meet higher criteria if you apply for some big amount of money. However, when applying for quick and short-term loans, many lenders won’t require the presence of a guarantor. So, who qualifies to be guarantor and what does a guarantor need to provide.

Who’s eligible to be a guarantor?

The guarantor is, by definition, a person signing a loan contract along with a borrower and accepting to become liable to repay the borrower’s debt if the borrower fails to do so. The lender turns to the guarantor only after all other means of getting the borrower to fulfill financial duties fail responsibly. Therefore, the guarantor is often the last option for the lender to collect its provided loan before charging the borrower for bad credit loans. If guarantor also fails to repay the debt, credit score decreases to him as well. Considering all of this, the guarantor is usually a person closely related to the borrower and financially steady enough to secure lent loan. Depending on the loan model borrower chooses, the guarantor is required to meet various criteria.

Guarantor responsibilities

Since loan lender turns to guarantor’s debit account to repay lent loan once the borrower has defaulted, the guarantor has to be a person with regular incomes high enough to provide sufficient amount of money at the debit account during every month. Hence, valid proof of employment and regular incomes provided to the lender is the first thing guarantor is responsible for. If the borrower is applying for bigger amounts of money via more rigorously regulated loan system, the lender may set request for the guarantor to be a homeowner. The guarantor who possesses real estates will go through the process of property validation and the lender will estimate the total sum that could be recollected by mortgages and auctions if the guarantor fails to repay the debt as well. In all cases except for some bad credit loans, the guarantor has to have a clear credit history and the more positive credit score the better terms for the loan.

Should you be a guarantor or not

There’s no straight answer to this dilemma since it all depends on the specific situations and individual relations. Before accepting to be a guarantor, make sure you are fully aware of all the responsibilities and obligations you will be liable of and make a reasonable estimation if you are capable of coping with them. Also, make an objective judgment of borrower’s situation, behavior and life circumstances. Only when you trust your borrower enough and see real methods of repaying the loan, feel free to become a guarantor.