When you apply for a guarantor loan, your nominated guarantor will need to provide details about their income and credit history. Some guarantors may be rejected if they do not meet the criteria set out by the lender. Usually, a guarantor will need to be on a higher than average income or has an excellent credit history. The likelihood of them being accepted as a guarantor will also increase if they’re a homeowner, for example.
You will be required to pay a higher than average interest rate on a guarantor loan, though this will vary from lender to lender. Typically, the interest rate will be between 40% and 50%.
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