At GuarantorLoans.com, we feature a number of companies that offer loans like Amigo. Maybe you have used Amigo before and are looking for a similar type of loan, which involves a guarantor. Every borrower will be required to find a guarantor to be part of their loan application. This is usually a close friend or relative who agrees to guarantee the loan and cover the repayments if you cannot.
Loans Like Amigo and How To Apply
We offer a simple comparison table that allows you to compare sites like Amigo. Borrowers can see the APR, loan duration and loan amounts from several other different lenders and find the right guarantor loan for them.
Whilst Amigo offer a representative APR of 49.9%, a loan amount of up to £7,500 and repayable over 5 years, our table allows to compare other lenders so you can find more competitive rates or borrow for longer if you wish.
Our website is completely free to use and we do not ask for any of your details. You can choose the lender you prefer and click ‘see deal’ where you will be taken directly to their website where you can apply. We will not send you any additional information or charge you any fees, although we may receive a referral fee from the lender if the loan is successful.
Things To Consider Before Applying For Loans Like Amigo
If you are planning on applying with lenders like Amigo, you need to first check their criteria. Although it varies between lenders, the general criteria is as follows:
- Applicants must be over 18
- Applicants must have a guarantor over 18
- UK residents
- Be able to afford repayments
- Working mobile phone, email address and debit account
- Guarantors should have good credit history
- Not on active bankruptcy, IVA or equivalent
Guarantors are required to be over 21 to reflect the extra responsibility involved and if they are a little older, they will likely have more credit history and be easier to assess. The ideal guarantor is typically someone that the borrower knows very well and is able to discuss their finances with such as a spouse, parent or sibling. Your guarantor should be fully aware of the application so it is important to get their permission beforehand.
It is common for those applying for guarantor loans to have bad credit with some lenders willing to accept those with a history of IVAs and CCJs and some saying they do not – so this is something you may need to check.
But since borrowers are accustomed to having less than perfect credit scores, it is recommended to find a guarantor with a good credit history. Lenders consider that if you have a guarantor that has regularly made repayments for other loans and credit in the past, and they are willing to guarantee your loan, there is less risk involved.
Before applying, you need to check whether your guarantor is a homeowner or tenant. Some lenders require your guarantor to be a homeowner because owning a property provides extra security in case they need to raise funds – and also someone with their own home is going to be easier to contact in the future. There are also lenders we work with that offer guarantor loans for tenants too – so your guarantor does not need to be a homeowner and can be living in rented accommodation. However, it is still recommended for them to have a good credit score to improve your chances of being funded.
You also need to think about how you are going to repay your loan. Will you be repaying using your income from work? If you fall behind on repayments, you can end up paying more in added fees and it will cause damage to your credit score. It will also require the guarantor to pay on your behalf, which can cause a financial burden. So it is recommended to think about your income and outgoings over the next few months and years and consider how you are going to repay on time.
What happens during the application for sites like Amigo?
Fill in your details – By clicking on the lender of your choice, you will be taken to their website where you can start the application process. You will begin by filling in a few basic details including your name, address, contact details, income, employment status, how much you wish to borrow and reason for your loan.
Next, you will be required to provide details of your guarantor, with most lenders allowing you to add one more than one during the application process so they can decide which is the best one for you. You will need your guarantor’s name, address, contact details and bank account details and make sure that they know about the loan application.
Loan agreement – If you pass the initial checks and make it to the next stage of underwriting, both the borrower and the guarantor will be sent a loan agreement via email highlighting the terms of their loan agreement. Both parties will be required to electronically sign the document using a PIN code sent to their mobile phones. This also allows the lender to confirm that they have a working mobile phone. Applicants can send in the agreement by post if they prefer, although this will take a little longer to process.
Additional checks – The lender will usually give a phone call to both the borrower and guarantor to confirm their details and make sure that they understand the terms and responsibilities of their loan agreement.
The lenders we work with will normally carry out a series of credit and affordability checks to determine if you are eligible for a loan, how much you can afford to borrow and how long for. For more information, visit our guide on the checks carried out by guarantor lenders.
Transferring the funds – If the application is successful, the funds will typically be sent to the guarantor’s debit account first. This is a standard procedure and gives the guarantor up to two weeks to decide if they still want to go ahead with the loan. So they can decide to pass on the money to the borrower as agreed or they can choose to cancel the agreement and send the money back to the guarantor lender with no extra charges.
This is a security measure carried out by lenders to confirm that there truly is a guarantor involved and for the very least, if they send the funds to someone with a good credit history, there is the likelihood that it will be returned.