While requesting for a loan for the first time you might find out that it is not an easy task as most lenders prefer not to work with the borrowers with no credit history. Dealing with such individuals is too risky as they haven't established the reputation of reliable borrowers. So, in case you haven't established a credit history yet, the chance of rejection for a loan is high. That won't be a problem while obtaining secured loans, but if you need an unsecured form of a borrowing you will need to look for some other options available.
Such an option is a guarantor loan. Certainly, to be qualified for a loan one should meet certain requirements as well. The most important thing that you must do is to find a guarantor a person who takes the responsibility of paying a loan off in case you fail to do this. A person who has a good credit and a stable job can act as a guarantor.
Guarantor loans are specially indicated for the borrowers with a poor credit history or with no history, whereas others types of borrowings can be not available for such borrowers. With the help of such loans you are able to improve your scores if the loan is paid off without any problems. If you manage to repair your credit scores, you will have the opportunity to qualify for some other forms of loans with better terms in future.
Note that the individual takes on responsibility when acting as a guarantor which is a rather risky thing. The guarantor loans are unsecured borrowings that are based on the guarantor's credit history. Such loans have quite competitive interest rates making such loans quite a beneficial type of a borrowing.
Usually someone whom you know very well and whom you can trust can be a guarantor for your loan. In most cases it is someone from your family or a friend. Your guarantor must know your financial standing and your ability to make the repayment of the loan.
Guarantor loan companies offer such loans to the borrowers with no credit history and to those who have bad credit scores provided that the guarantor cosigns the loan agreement together with the borrower. Besides, the requirements for a loan are the following: the borrower must be of full age and a citizen of the country where the loan is applied for.
Interest rates that come with the loan depend on the lender. So, before getting a loan, make sure you choose the one with the most favourable rates.
Guarantor loans give you the opportunity to start building your credit history or improving a bad one. What is important to consider prior to applying for a guarantor loan is to make sure you can afford this loan. Otherwise it is the guarantor who will carry the responsibility of paying off the funds you've taken.
The author of the article is a professional loan expert working with guarantor loans. If you have some questions regarding this type of a borrowing you can ask the author directly on his personal website. Besides, there you can read more of his articles in which useful recommendations and advices are given.