Who is a guarantor?
A guarantor is one who is willing to become a back up for other person’s commitment. Suppose if we take a case of loans, a guarantor will be assuring to repay the loan. If the loan borrower is unable to pay the debts then guarantor will have to take the step of borrower by paying the loan on their behalf. All that you need in order to take these loans is clear understanding between guarantor and the borrower. They should have a mutual commitment in taking this loan and also in repayment of this loan. They should have a clear idea about how the guarantor loan processes and what are the circumstances they need to undergo after taking the loan with http://www.guarantorloans.org.uk/short-term-loans.html. There are numerous different reasons for which a lender asks for a guarantor.
Here are some of the common reasons to have a guarantor:
- Poor credit history of a borrower
- No job history
- Lack of past credit
- Lack of credit history
An individual should satisfy definite criteria in order to be a guarantor. Different companies will be setting different criteria’s for guarantors. Following is a guarantor criterion for one of the loan companies.
Features of guarantor criteria:
- The guarantor should have a good credit history meeting all the requirements.
- They should get a fixed income and full time job.
- They should own a home.
- The guarantor and borrower should not have financial link or dependency. For instance, a partner who is living with borrower cannot be come a guarantor for him.
By being a guarantor, you can help your friend or relatives or any of your dear ones in a great way. Good levels of trust should be mixed between borrower and guarantor. They should have a healthy discussion and understanding in discussion about income and expenditure of borrower to ensure the repayment of loan.
