As a person on benefits and a member of the UKs 3 million unemployed (actually there are over 5 million people out of work in the UK today) the need to borrow money from a loan, preferably unsecured is a strong reality. Guarantor Loans are one of the few options for the unemployed and people on benefits for a very simple reason: a guarantor loan requires no credit check meaning anyone can get one regardless of their circumstance. People with bad credit, no credit history, and those with no home ownership or other possessions they can use as security for a loan.
Being unemployed and on benefits leads to a clear and obvious conclusion: money is always short. Being out of work means little income at the best of times and yet the bills still run in, emergencies still happen and the kids still want the best and highly expensive presents. How can a person on benefits and out of work possibly get a loan to meet those financial needs and at times obligations? Simple, by using the best thing you have going for you, your family and friends. If you know someone who is a homeowner and has a good credit rating then you can get one of the different lenders guarantor loans. By taking care of the responsibility of the guarantor loan your guarantor is both ensuring you can get a loan while you pay it back. This means should you fail to repay the loan they then become the owner of the loan and need to pay the loan back.
To get a loan when you are unemployed or on benefits requires a lender to either lend you money based upon your word only or to find some other non home based security which they can use to ensure they take repayment of their money. This is why guarantor loans are so popular. While you may not have a great financial track record someone close to you may be prepared to vouch for you and act as the security or guarantor as it is known for the loan. The idea is they will repay the loan if you miss payments and therefore ensure the debt will be repaid. It’s a win win situation for all concerned. If you are capable of repaying the loan and you have a friend or family member willing to pay back your loan if you can’t then you will automatically qualify for a guarantor loan.
Will I be accepted if I am on benefits?
Yes you will so long as you can find someone who is prepared to be the security for the loan and repay it if you fail to do so. It’s that simple and this involvement of the second person as security is exactly why you can get the loan even if you are unemployed in the UK and on benefits. If you are still unsure as to whether this is a good option for you shop around, a guarantor loan is likely to have an APR of around 45% which is considerably less than some of the other options.