Category Archives for "Guarantor"

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. A guarantor loan lender 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.

Does Being a Credit Guarantor Affect Your Credits?

Agreeing to become a credit guarantor and co-sign loan contract is merely generous and noble deed, especially considering the fact that people usually accept the role of credit guarantor to support financially their spouses, families and close friends. This is particularly important to those with low incomes and bad credit loans history, but in the need of financial support in the long run.

What does it mean to be credit guarantor?

Being a guarantor means that you are legally obligated to step in when a borrower defaults and to conduct repayment of the lent loan on borrower’s behalf. Since you will become liable for the refunding of the total unpaid sum to the lender, there are usually legal strings preventing you from avoiding these obligations. Breaking those rules will lead to various penalties and in the worst scenario to legal sanctions with long-term consequences. On the other hand, if your trusted borrower repays the lent loan in the stipulated time frame, you may be a credit guarantor without ever having to deal with it in any way. Which scenario will happen to you depends on numerous aspects, but being a guarantor has the potential to affect you in many ways.

Positive effects of being credit guarantor

The first and the most obvious positive effect of accepting to be someone’s loan guarantor is the opportunity to support someone financially, to help someone go safely through tough situations and to help someone invest into any form of new change in life. Since borrowers are usually closely related to the guarantor, being a guarantor often effects directly the mere guarantor. The best example is being a guarantor to the relative and assisting him in gaining the loan to invest into a new home. The home where you might spend time in the future. Also, if the lender, after all, turns to you to charge borrower’s unpaid debts, you can still save your credit score by sticking to the deadline and placing payments timely. This will go to record and show to your future lender that just because the borrower wasn’t reliable enough, it doesn’t mean you are too.

Negative effects of being credit guarantor

Unfortunately, there are more negative effects than positive ones. If the borrower defaults, the lender will go for your debit account and draw the required money regardless of your current balance check. If it happens that you are not capable of repaying this debt, the lender might auction your property and other assets to compensate for the missing money. This will certainly affect your current budget in a long run and it might even burden you with significant mandatory expenses per month. Also, if you default to repay the debts, the lender will report this fact and decrease your credit score, which will lower your future chances of getting loans lent for your own needs.