If you are under 21 or finding it difficult to get car finance on your own… you might be eligible for a guarantor Car Finance loan.
A guarantor loan means you are not going it alone. A guarantor is someone who can step in and make your repayments if whatever reason you cannot.
Being a guarantor involves helping someone else get credit. Acting as a guarantor, you ‘’guarantee’’ someone else’s loan by promising to repay the debt if they can’t afford to.
You may need a guarantor if you have no credit history, (that’s because you are young and haven’t built one up yet, or new to the UK) have a very low credit score, recently started a new job or have a low salary.
Anyone can be a guarantor, well almost anyone. It’s often a parent or spouse (as long as you have separate bank accounts). If you are considering asking someone to be your guarantor it may be worth checking that they are over 21 years old, have a good credit history themselves and have financial stability. It will also be viewed favourably if they are a homeowner. Most lenders will require a guarantor to be a homeowner, but some may consider renters who have been at the same address for many years and have an excellent credit history. If your guarantor has a bad credit history they are unlikely to be accepted by lenders because a lender needs to reassured that the guarantor can be relied on to make payments if the borrower can’t. It is worth noting that guarantors can face financial consequences if the loan is not repaid.
A check will be made on both the borrower or guarantor by the lender to assess whether the borrower or guarantor will be able to repay the loan. As part of the application process, guarantors, along with the borrower, must provide information about themselves and their financial situation.
This information will be used to conduct credit checks and review your credit history and reveal your credit score, giving the lender insight on how well you’ve repaid other types of credit and loans in the past. Your guarantor may want to check their own credit score before you apply for guarantor car finance to ensure that all their information is correct and up-to-date.
Consistent repayments on your guarantor car finance can help you to build your credit history. Therefore, you may qualify for car finance on your own in the future.
We are here to help. Applying with We Finance Any Car only takes two minutes and won’t affect your credit score.
