Guarantor Finance
Your Path To Vehicle Ownership
Guarantor finance is specialised type of loan designed to support individuals who might face challenges securing a vehicle loans through conventional means. In this arrangement, a third-party individual, often a family member or close friend steps in to vouch for the borrower. If the borrower is unable to make repayments, the guarantor assumes responsibility for clearing the outstanding dues.
Who Benefits From Guarantor Finance?
Guarantor finance serves as a lifeline for individuals who would otherwise struggle to obtain a vehicle loan. Here are instances where it proves particularly beneficial:
- Young Drivers: As a young driver, building credit history may be a hurdle, making traditional finance difficult. Guarantor finance offers a solution by considering the guarantors credit score alongside yours.
- Poor Credit Score: Individuals with a poor credit score find it challenging to secure loans. A guarantor helps mitigate this risk and improve the chances of loan approval.
Advantages Of Having A Guarantor
Besides increasing the likelihood of loan approval, having a guarantor can open doors to several benefits, including:
- Higher Loan Amounts: With a guarantor, you may secure a larger loan amount than you would on your own. This enables you to invest in a better or newer vehicle while ensuring manageable repayments.
Selecting An Ideal Guarantor
Choosing the right guarantor is crucial for a successful guarantor finance arrangement. Here's what to consider:
- Eligibility Criteria: Typically, a guarantor should be over the age of 21 (sometimes 18), possess a good credit rating and demonstrate a consistent record of timely repayments.
- Financial Stability: Guarantors need to display the ability to comfortably meet repayments should the borrower face difficulties. They must assess their financial situation and ensure that taking on this responsibility won't strain their finances.
- Property Ownership: While many guarantors own their homes, some lenders may accept long-term tenants with an excellent credit history, provided they've resided at the same address for an extended period.
Responsibilities Of A Guarantor
Being a guarantor is a significant commitment that demands trust and financial stability. A guarantors responsibilities include:
- Financial Liability: A guarantor must be prepared to make repayments if the borrower defaults. This commitment is vital, and they must ensure they can meet these obligations.
- Impact on Credit Rating: Both the borrower and guarantor must understand that a default can negatively affect their credit ratings, making it imperative to manage the loan responsibly.
- Risk to Property: In extreme cases on non-repayment, the guarantors home may be at risk of repossession, underscoring the importance of understanding the responsibilities involved.
Embarking On Your Van Finance Journey With A Guarantor
Guarantor finance offers a pathway to vehicle ownership for those who face barriers to traditional loans. It provides an opportunity to secure the van you desire while building or rebuilding your credit history.
Discover how Guarantor Finance can bring your vehicle dreams to life.