Who is a ‘guarantor’?
A guarantor is a person who co signs an agreement of loan with you stating that he or she will repay your debt in case you are not able to repay the debts with your income. More commonly a spouse or a relative comes forward with this type of guarantee. However, anybody can become your guarantor provided they have a good credit history and have enough money to repay your debts even after fulfilling their basic needs. They also need to be above 18 years of age to be eligible for this. So, in short, a guarantor is the person who agrees to step in when you are unable to get a proper loan from the regular banks.
What is a guarantor loan?
As you might have already guessed, a guarantor loan is a type of loan which you get from the lender when you are unable to get a normal loan. This happens when you have a poor credit history for obtaining a loan from the banks.
That being said, banks also lend you a guarantor loan, only if you have a guarantor to sign for you. This is why it is important that you get a guarantor, even if you are able to repay the debt owing to your current financial position.
Is guarantor loan a good option?
Guarantor loan has many advantages. Whether it will be a good option for you or not has to be decided by you; but we can tell you that a guarantor loan certainly has many advantages. The first advantage of a guarantor loan is that it will reflect on your credit score positively, if you are able to successfully repay it by yourself. So, if at any instance you feel like you have to take your credit score up by a notch and you have the adequate funds to avail a loan, a guarantor loan is perhaps the best option.
A guarantor loan is very flexible because if you want to remove the guarantee at any stage of the loan repayment, you can do so. But of course the bank needs to be assured that you will repay their debt; only then will they remove the guarantee from above you.
How can I estimate my repayment amount?
It is very important to get an estimate of your loan amount which is why it is very important to get the guarantor loan calculator to track your expenses and how much you are going to share that amount with the guarantor. A guarantor loan calculator gives you a clear idea about your own capacity of repaying the loans because you cannot spend your whole income in repaying the loans. Keeping aside your income one has to give you an idea about the amount that you will be spending each month.
Since a guarantor is involved in all of this, you can give them an estimate too, via the guarantor loan calculator here at GuarantorLender.