Given that more and more people are taking an interest in guarantor loans, it is fair to say that this is a topic of conversation that is taking place on a regular basis in the United Kingdom. In many ways, this is a good thing. If we are looking for people to make informed and intelligent decisions when it comes to finance, it is important that people have conversations and fully understand what is available to them. Of course, there is a problem when this information gets taken in the wrong way or people say things that aren’t quite true about guarantor loans.
One of the problems about guarantor loans is that many people are still unaware of what they are or what they offer to people. This becomes a major issue when people decide to talk about these loans or voice opinions about guarantor loans without having any knowledge. A little knowledge can be a very dangerous thing and it may be that you have formed a false opinion about guarantor loans due to what you have been told by someone else. This is why it is of benefit to find out the truth about guarantor loans.
Guarantor Loans are not just small Loans
One of the biggest problems for guarantor loan lenders comes with the fact that many people mistake them for payday loans. This isn’t the case. There are many differences between payday loans and guarantor loans, with the amount of money that can be borrowed on a guarantor loan being an immediate indicator that these are not the same style of loans.
With a guarantor loan, you will find that some lenders will allow you to borrow up to £15,000 which is definitely something that most people would class as being more than a small loan. Of course, you shouldn’t take out this amount of money just because you can but you’ll find that having access to this money, if it is required is of considerable benefit. When it comes to finding the loan that is right for you, the additional flexibility provided by a guarantor loan should be a positive thing.
Guarantor Loans don’t have an unnecessarily high rate of APR
This may be another area where people get confused between a guarantor loan and a payday loan. Yes, guarantor loans have a higher rate of APR than loans from traditional lenders, but many people are not able to borrow money from these lenders. If you have a bad credit score or you need money in a hurry, you’ll find that guarantor loans are likely to be your best option.
When you compare the APR for a guarantor loan with the APR for a payday loan, you will then see what a high rate of APR looks like. The APR for payday loans is astronomical and this is something that has caused a lot of people a great deal of problems and concerns. The higher the rate of APR, the more money you have to pay back so it makes sense to find as low an APR as you can and this is why opting for a guarantor loan makes a lot of sense.
Guarantor Loans don’t have to be Paid back within a Week or a Month
This is another area where people seem to be confusing guarantor loans with payday loans. One of the key benefits of obtaining a guarantor loan is the fact that it can be paid back over months or years, which means that affordable monthly payments can be found. The longer a loan is paid back over, the more interest a person will pay so you don’t want to elongate a loan longer than you have to but you should find that a guarantor loan provides you with the chance to pay back loans at a reasonable rate and at a reasonable length of time.
If you were of the opinion that guarantor loans and payday loans were the same, it is time to revaluate your options. There are major differences between these two loans, and choosing the wrong one could cause you a lot of problems. Anyone that is keen to take control of their finances will find that a guarantor loan is the best option for their needs.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.