• January 19, 2023
  • Adrina Martinez

With recent flexibility introduced by lenders in improving the feasibility of the loan sanctioning process, tenants can now easily exercise more freedom in gaining access to funds.

In this new approach, the tenant no longer needs to find a valid homeowner to be a guarantor for his loan. Instead, he may call in a tenant or a non-homeowner to the agreement for minimal finance.

We may demand a guarantor in situations where:
1. The borrower lacks reliable income or employment proof
2. The borrower has bad credit history with too many high-interest loans
3. The borrower has credit card payments due on the profile
4. The borrower needs a sum exceeding £10000 for his urgent requirement at bad credit

A guarantor is someone known in the family who shares an interest in providing their confirmed support by proving their stable finances and credit score support. The lender, in this case, identifies and bases the loan agreement on the ability of the guarantor to pay the loan amount back in case the borrower defaults.

But sometimes, finding a guarantor could be a hard nut. The reason can be:
1. You do not want to disclose financials to someone you hardly share a bond with
2. No one agrees to be the guarantor, even after continuous attempts
3. Relying on someone or a distant known one for long-term support sounds risky
In situations like these, tenants look for someone he shares the apartment with and bond too.

What Are Tenant Guarantor Loans?

A non-homeowner or tenant guarantor loan does not require a guarantor to be a homeowner (he may be a person on a mortgage or owns a home outright).
Rather than looking at equity or the property itself, lenders evaluate the guarantor's credit history, income, and outgoings. 

We may approve the loan if the tenant has stable finances and a credible credit history. In that condition, it does not matter whether he is on a mortgage or rent. The loan can be competitive in terms of interest rates. The actual charge on the rent depends on multiple factors:

1. the loan amounts
2. duration
3. financial circumstances of the guarantor and the borrower
4. credit history of both the guarantor and the borrower

How Do These Loans Work?

Lenders may require a guarantor when you apply for an unsecured loan with a bad credit score for a flexible amount. However, tapping the best tenant guarantor loans from a direct lender like FocusLoans can bring in a fellow tenant with refined credit history and disciplined finances to quickly qualify for a higher amount.

They agree to partake in the loan obligations by signing the agreement as co-signer. He would have to step in to make repayments if the borrower could no longer manage it.

While skipping repayments owing to financial decline may impact the borrower's credit standing.
Missing loan refunds could also be detrimental to the guarantor’s credit score.
Following the loan approval, both the guarantor and the borrower must promptly adhere to the loan terms and repayments. On approving the conditions and the agreement, one may receive the funds soon in the bank account. Use the funds responsibly.

What Are the Criteria for Both the Borrower and Guarantor to Qualify for The Loan?

For a non-homeowner loan, there are several criteria that you and your guarantor must meet. The criteria may differ from a lender-to-lender.
Here are the basic eligibility criteria to qualify for the loan:

Criteria for the borrower
1. Age between 18 and 75 years
2. Must be a citizen of the UK
3. Must be working full-time/part-time/ self-employed/ pensioner
4. Holds a UK bank account
5. Able to afford the loan

Criteria for the guarantor
1. Aged between 21 and 75 years
2. Must be a citizen of the UK
3. Has a good excellent credit score
4. Share a stable income source
5. Share a good relationship with the borrower
6. Must understand the legalities of the agreement and knows the ins and outs of the commitment you can undertake.

What should a borrower confirm before signing the deal?

The loan terms are competitive and impact your financial health if you miss over 5 payments in a row. It may impact future loan confirmation and approval possibilities.
Thus, before availing of the loan, analyse the following:
1. Can you meet the terms of the loan comfortably?
2. Do you fear losing the relationship due to a rift in relations?
3. Can you trust the guarantor for the long-term bond?
4. Do you have an additional backup to complete the loan if the guarantor’s finances change?

Can I get tenant guarantor loans if I am an unemployed undergraduate?

With an imbalanced economy and financial issues, one can hardly own a house in the country. Moreover, with house prices rising continuously, it is becoming ever more unaffordable. That’s the reason most Britons live on rent.
But situations get grim if you lose your job unexpectedly or suffer a furlough.

Yes, you may get tenant guarantor loans if the other person agrees to back up the finances. But the possibility is minimal.
The reason is- You lack employment, and thus, the guarantor would solely be responsible for the interest rates and other loan amount repayments.
Finding a person who can take 100% responsibility for your loan is challenging unless-

1. You share a really deep bond with the person
2. Have helped the person financially in the past

Thus, it is ideal to imagine that a lender may not approve of this kind of loan in case he doubts the guarantor’s intent. Not only the provider, but you will be uncertain about the reliability of something like that.

What can you do when you need money urgently as an unemployed?

In unemployment, an individual not only encounters financial loss, but a credit score also drops. It is due to pending credits in the profile and the unavailability of funds to clear them. 
But situations of crisis demand urgent cash help. You may need money to attend:
1. An urgent medical help
2. Pay the pending bills
3. Conduct an emergency doctor's visit
4. Cash to fund necessities like- food and energy fuels

Whichever small need you need to counter the very moment, you can trust loans for the unemployed for bad credit from direct lenders like us.
We provide minimal cash help to individuals facing stressful cashless situations as unemployed.

Whether you share bad credit history or low income, you may consider yourself in for a small cash help with us without any massive costs to incur.

Bottom line

Yes, you may get a tenant guarantor loan if you cannot find a homeowner to back your unstable finances and credit score. Identify the guarantor’s ability to assist you and the viability of the long-term agreement before signing the terms.

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