For a personal loan a sum of money is lent to you on an interest and capital basis where you are responsible for meeting the repayments. Your credit rating will be an important factor for being accepted, alongside your income for affordability purposes.
Sometimes, people use their homes or other properties as collateral to support a loan, these are often referred to as secured loans and have the same risks as a mortgage. Unsecured personal loans do not require security.
Personal loan rates are often provided on a rate for risk basis, in that the interest rate you are able to obtain may well depend on your previous credit history and the payment status of any current loans or mortgages. Rates can be a low as single digits or go up to the high nineties or even beyond. Always check you are happy with the rate offered and that you can afford the repayments.
Guarantor loans are significantly different. These are still a type of personal loan, but unlike with a standard individual personal loan, a second person is required to act as a guarantor. This`guarantor` is responsible for making repayments if the person taking out the loan fails to or falls significantly behind on repayments. In some cases this extra security can help someone obtain a loan when they have been declined elsewhere. Rates on these may well start in the late twenties and go up to circa 50 percent.
In terms of who can be your guarantor, they cannot be someone who is financially linked to you, such as a spouse who you share a bank account with. However, it can still be a family member or a close friend or someone you work with. The usual requirements are that they are over 21, have a good credit history and can afford the loan if you cannot. Having a home owner as a guarantor is a requirement for some guarantor loan lenders and may enable you to apply for slightly larger loan amounts.
Unsecured Personal Loans
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST
Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home. We Advice Upon & Arrange Mortgages & Loans. We Are Not A Lender.
First Choice Finance is a trading style of First Choice Funding Limited of The Old Courtyard, 103 Buxton Road, High Lane, Stockport, Cheshire. SK6 8DX. Copyright protected.