Young people who are in need of money find it quite difficult to get the money in the time of their need. This is because no one trusts them, as they do not have any previous loan record. Thus, this makes the lender skeptical about the credentials of young people. Even with all good intentions, young people find it quite difficult to get the loan sanctioned. Financial institutions have come up with a loan product which is targeted towards the young people, who do not have any credit history and want to take a loan. This product is personal loans with guarantor.
What is a personal loan with guarantor?
Personal loan with guarantor is a type of unsecured loan but requires a guarantor.This loan is targeted for those people either who do not have credit record or have bad credit record. In this loan, the guarantor signs the loan agreement along with lender and borrower. He ensures the lender that if the borrower fails to make the payment on time then the guarantor will pay the money on the behalf of borrower. As this loan is secured by the guarantee of the guarantor, thus it attracts easier terms and conditions.
Who can apply for this loan?
Anyone who has no credit history or the person who is applying for the loan for the first time can apply for this type of loan. Even people who have bad credit history can also apply for this type of loan. People who have no credit history but have a guarantor with good credit rating can get a loan of a big amount, whereas the people who have bad credit history can get a loan of the specific amount with guarantor.
Benefits of secured personal loan
- You get the loan with a lesser rate of interest as the lender is assured that his money is going to return. In case the borrower defaults then the guarantor is going to pay back the loan.
- You can opt for a larger sum of money if the guarantor has good credit history or the guarantor is the owner of a large property.
- You can get quick approval to the loan as the loan is having a guarantor.
- Repayment time is increased in comparison to the unsecured loan. It means that you will be having lower EMI to pay.
Personal loan with guarantor provides an opportunity to take a loan for those who are going to take a loan for the first time. This loan can be accessed by those also who have bad credit history.