subject: Guarantor Loans and Increasing Confidence in Financial Markets [print this page] Guarantor Loans and Increasing Confidence in Financial Markets
Guarantor Loans are fast becoming the norm in the unsecured personal loans sector. There are a number of reasons for this, the main and most obvious is the credit crunch and the proceeding tightening of criteria and lack of lending from financial companies.
The reason behind this is to reduce the risk these companies are exposed to while they try and restore their capital to pre-credit crunch days! Obviously if a customer applies for a loan by themselves, then there is only one person who can pay back the debt, whereas if a loan is signed by both the applicant and a guarantor, then there is an additional person who is able to repay the loan if the applicant comes into difficult circumstances - therefore maintaining security for the finance company. As well as maintaining security for the company, this also provides security and peace of mind for the applicant, knowing that their loan will be repaid even in dire circumstances.
As the number of these loans being completed is increasing day by day, the public awareness of these products will gradually increase and I anticipate that they will slowly become a much more normal way of taking out a loan. If you look at guarantor loans available now, you will see that the APRs are dropping and acceptance rates are increasing, due to both competition in the market and confidence being slowly restored after the credit crunch of previous years.
A guarantor loan is normally available to those looking for up to 3000 and over terms of between 1 and 3 years typically. If you compare the products to other available options such as payday loans then you will notice that the cost of a guarantor loan is far more competitive than they first may seem. If you do not believe me, take a look yourself at the products!
