Who to Choose for a Guarantor for my Guarantor Loan?
If you have decided to get out a guarantor loan, then you will need to find a suitable person to be your guarantor. This can be tricky as they need to fit certain criteria :
- Good credit rating
It might be relatively easy for you to find someone that you know that has a good credit rating. It can be hard to tell without asking people though. You might find that it is those that you least expect that might have a poor credit rating or that people may not know what their credit rating is and so they will have to find out before you will know whether they will qualify. It is easy enough to look this up and you can do it for free but you may have to find out how to do and show them how to do it before you can find out whether they will qualify.
- Willing to make loan payments if you miss them
Finding someone willing to help you out might be tricky but it depends on the people that you know. You might find that your parents or grandparents will be willing to help you, particularly if they have helped you out financially before. It might be harder to convince friends to do this for you but it is normally someone that you love that will most willing to help you out. Of course, they may also want you to repay them once they make that repayment for you. It is important that you find out whether this is the case or not. Some people will be happy just to pay it for you and help you out in your time of need. However, others might be more likely to want you to repay the money. They may want you to repay it as soon as you can or feel that you should wait until you have enough money to do so. Some might say you can wait until the loan is repaid. It is a good idea to find out what they feel and come to some sort of agreement with regards to repayments before they sign up for the loan.
- Have enough money to make those payments
It is also important to make sure that they have enough money to make the repayments. You might think that is their concern, but you should make it your responsibility. This is because if they run short of money, they could end up blaming you. You could also feel bad if you know that they are short of money because they have been having to make your loan repayments. Therefore, it is a good idea to have a chat with them about this. It can feel a bit personal, but you are asking them to help you out financially so you have told them about your financial situation so it should therefore be okay for them to let you know about theirs. It is wise to check with them whether they would be able to manage if you missed any repayments or all of them. It is good for them to assume they will have to pay it all and work out how they will cope. Hopefully, they will not have to do this but if they are prepared then this will mean that they will not be in shock if it does happen. It is well worth preparing them for the worst but explaining to them that you will try your hardest to make sure that they do not have to pay anything. They might even give you some help on budgeting so that you can be in a better situation to make those repayments. It might even be worth asking them for some tips.