How We Choose Our Lenders
At GuarantorLoans.com, we carefully vet the lenders that we work with to ensure that they are fully authorised by the Financial Conduct Authority and are passionate about Responsible Lending and Treating Customers Fairly.
We want to ensure that when you are clicking through the lender of your choice, you are going to working with someone who has your best interests at heart and this is a key to their corporate culture. This includes:
- Taking measures to ensure the individual can afford their loan
- Shows their fees and costs in a clear and transparent way
- Do what is best for the customer
We only work with guarantor loans direct lenders so that when you are putting through your application, you are working directly with that company and not any other middlemen or brokers who could charge upfront fees. We want the application process to be as clear and simple as possible so that you can apply and get obtain the finances that you need.
What We Include In Our Lender Profiles
With every lender profile provided, we want you to have a clear overview of their product including:
- Minimum age
- APR and representative example
- Whether they accept tenant and homeowner guarantors
- Loan amounts available
- Loan lengths available
- Credit license and FCA numbers
We also like to explain the history of the guarantor loan providers, when they started and how their products emerged. Also, you tend to find that each lender has their own unique selling point that makes them different such as lending to tenants, large loan amounts or faster funding – and these are all interesting things to be aware of.
What Checks Are Carried Out?
The lenders we feature vary between the checks that they carry out, since they all have a different appetite for lending and bespoke products on offer. However, they generally tend to follow the same outlines below:
Initial Application: In the original online application form, there are some basic questions you will need to fill in regarding age, residence, income, employment and expenses. This allows our guarantor lenders to filter out the initial criteria such as being over 18 years of age, living and working in the UK and have a regular income that enables you to make repayments on time. Specifically, some lenders have different rules when it comes to lending to those with IVAs, CCJs, history of bankruptcy and also those on benefits, unemployed and earning their income through pensions.
Loan Agreement: An online loan agreement must be signed by all parties involved. This is usually completed via a digital online signature or Esign to speed things along. It highlights all the key points of the agreement including loan term, loan amount, repayments, fees and repayment responsibilities. It is essential that the guarantor co-signs this agreement.
Credit Checks: This is a key part to any loan application whether it is a personal loan, mortgage or guarantor loan. Using the information from the three main credit reference agencies in the UK (Experian, Equifax and CallCredit), they are able to review the credit history of the customer and the guarantor and decide whether they are eligible for a loan.
The main beneficiary of the loan is not necessarily required to have a great credit score (since they require a guarantor). Therefore, the credit rating of the guarantor is crucial and someone with a good history and ideally a homeowner status will maximise your chances of approval. It is based on the idea that if someone with a strong employment and credit history is willing to support you, we (as the lender) can support you too.
Affordability Checks: This is where the lenders assess your income and expenses against the amount you have requested to borrow. They have to check that you can make monthly repayments without falling into financial difficulty. A lot of these questions about what you earn each month and what your monthly expenses are (travel, rent etc) are included in the main application and further evidence may be requested by the lenders in the form of bank statements and pay-slips.
Phone Call: Most lenders like to arrange a phone call with the individual borrower and guarantor to ensure that they both fully understand the responsibilities of the guarantor loan. Above all, the guarantor is expected to step in and repay in the event that the main borrower cannot.
Sending Funds: All the lenders we work with typically send the successfully funded loan to the guarantor first. This is a security measure so that they know the monies are definitely going into the bank account of a good credit customer. There is a two week ‘cooling period’ so the guarantor can decide to pass on the funds in whole or in part to the main borrower – or decide within the two weeks to send the money back to the lender with no extra charges.
For any questions about working with GuarantorLoans.com or about our lenders, feel free to contact us here.