A guarantor loan is a loan approved based on sparse background checks and having a guarantor to sign along with a client. What makes this a much more accessible option is the fact that most applications that would normally not be approved by a bank or for other types loans, have a much higher chance to be approved for a guarantor loan. This, depending on the company offering the loan, includes former bad credit, having no credit history in the first place, or even defaulting in the past.
This is because of the added security of having another individual promise to pay back the loan in case the person who first acquired the loan would be unable to.
A guarantor may be a friend or family member, who will agree to take responsibility for any defaults or inability of payment. In other words, if you mess up, someone else will step up and make sure the debt is paid. This negates a lot of risks otherwise associated with loans. Having a third party not only ensures the debt will be paid for in the end, but also helps relieve some of the stress of the client- such is having a plan B. Of course, it is not acceptable to lax when paying the loan just because someone else will pick up the slack. There has to be a solid agreement between both parties of the responsibilities involved.
The repayment period varies greatly; it actually depends on the client. While there is a definite ceiling for the time, if the client will be able to pay the loan off much earlier, then all the better. However, if not, then not much pressure will be put on the client as long as he or she pays on time.
Criteria for loan approval can be different for different companies offering it. However, at the end of the day, as long as your credit history has nothing outstandingly negative and you have someone to sign the contract with you should you fail to pay the loan back, it is very likely that your application will be approved. Thankfully, since the process is very black and white because of a third party, it should not take more than a day or two to set it up. A guarantor loan is not only easy to acquire, but is also flexible in terms of the dues, approval and will be able to get you out of a rock and a hard place more efficiently than others.
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