Getting credit these days is becoming increasingly difficult. Gone are the days when you can easily get a loan from a bank or other loan lending companies. The global economic recession the world experienced some years ago has changed all that, especially if your credit score is not what you are proud of. This is where taking a Guarantor Loan from LoansWithGuarantor becomes the next wise thing to do.
However, before you apply for this loan, it is beneficial to consider the pros and cons of Guarantor Loans. Here they are:
Pros of Guarantor Loans
There are many benefits to be derived from taking a guarantor loan which are:
- It makes a loan available for you even if you have a bad credit rating. This is good news in relation to outright rejection that one will meet if a bank is approached for the same financial assistance.
- The interest rate is lower than that of other loan types, especially if you have a guarantor with a healthy credit score.
- The repayment plan is flexible. You have the privilege of either extending or shortening your repayment. This is a welcome development because you can leverage that to spread your repayment according to your financial power at any point while paying the loan.
- Guarantor Loans are always handy if you need a loan that is more than what a payloan can offer. For a larger loan amount to take care of some important needs such as buying a car and others, the loan is the best for you. You also have the liberty to borrow more if the need arises.
- The loans are unsecured. Your assets are not at the risk of confiscation if regular repayment is not possible as a result of some exigencies. Your guarantor is not exposed to the risk of losing his or her assets too.
Cons of Guarantor Loans
Despite the many pros of Guarantor Loans, it definitely has some cons that you may want to know. Some of them are:
- The guarantor will have to pay if the borrower is unable to live up to his promise of prompt payment.
- The good relationship between a borrower and a guarantor is always on the line. In the case of default by the borrower and the guarantor has to make the repayment, it may drive a wedge between them. This is a bad side of the loan that should be taken seriously since most guarantors are loved ones, friends and family members. Family members may turn their backs to each other if the inability to make regular repayment forces a family member or friend to bear the financial burden of a borrower.
- The credit score of the guarantor is usually considered. Therefore, it may be difficult to get a guarantor with the ideal credit score to vouch for a borrower.
Give a serious thought to these pros and cons before you go into debt and carry your friend or family along.