Representative Example: On an assumed loan amount of £750 over 12 months. Rate of interest 191.2% (fixed). Total repayment amount £1726.68 and total interest is £976.68. 12 monthly payments of £143.89. My Financial Broker is a broker, not a lender*.
* As a broker, we are unable to ascertain exactly how many customers take out a loan or the lender’s rate of interest particular to that customer, therefore our calculation is based on the mean APR of our panel of lenders.
With guarantor loans neither you or your guarantor are required to own your own home— you can be tenants living in rented accommodation.
What is a Non-Homeowner Guarantor Loan?
A non-homeowner guarantor loan is where you and your friend or family that co-signs your loan can be a tenant or someone who doesn’t own their own home. This allows you to borrow money with a guarantor that lives in rented accommodation.
In the past, guarantor loan lenders only wanted borrowers to have guarantors that were homeowners. This is because having a stable residence and mortgage usually meant that you were more financially secure and less likely to leave your premises.
Loans For Non-Homeowners
Many different types of loans come under the bracket of being “non-homeowner loans”:
With all these types of loan, tenants and those still living with family or friends are welcome to apply, and are potentially eligible for a loan.
Guarantor lenders have become more relaxed and are willing to offer tenants guarantor loans. After all, if you have a guarantor with a steady employment and good credit rating, they can be an excellent guarantor to have, regardless of whether they rent a property or not.
Which Direct Lenders Offer Guarantor Loans For Tenants?
There are various direct lenders across the UK that will offer guarantor loans for tenants including Buddy Loans, Bamboo Loans and Trust Two.
If you’re unsure which lender to approach, a broker can help narrow down your search. You can then apply directly with tenant guarantor lenders, helping you to get the loan you need.
How Much Can I Borrow?
With a tenant guarantor loan, you can typically borrow a few hundred or thousand pounds, repaid over several months in equal monthly instalments. The maximum you can borrow with a guarantor loan will generally depend on the individual lender and your credit rating.
Do bear in mind though, that the amount you can borrow with a tenant guarantor can be lower than with a homeowner. This is to reflect the added risk, as lenders consider the fact that a tenant could leave their premises at any point and be hard to get in touch with. So while you can still borrow the money you need, the maximum amount you can borrow can be slightly less.
What If I Have Bad Credit?
If you have a bad credit score, this can affect your chances of being approved. But guarantor lenders won’t only look at your credit file. They will also determine whether you can afford to make the repayments when making a loan decision.
Guarantor loans are designed for borrowers with poor credit history, which is why they require someone to cosign the loan agreement. We work with a number of lenders who can help you even if you haven’t got a good credit score.
Are Guarantor Loans For Non Homeowners Different To Traditional Guarantor Loans?
In the early days of guarantor loans, lenders required your guarantor to be a homeowner. This is because guarantor loans are technically unsecured loans, so if there was a property involved, the lenders felt it added more security.
If your guarantor had gone through the process of getting a mortgage, they would have proved that they have a good credit history and would be used to making monthly payments. In addition, a guarantor with a mortgage is less likely to move without notice and can always raise funds if necessary through a second charge mortgage or renting out a room.
But today, guarantor loans for tenants are available – so you do not necessarily need to worry if your guarantor is a homeowner or not.
What Does My Guarantor Need To Do?
When applying, your guarantor will be required to co-sign your online loan agreement, confirming the terms of the loan, and that they will be required to make any missed payments on your behalf.
The lender will usually have a phone call with the main borrower and the guarantor to ensure that they both understand the terms of the loan and their responsibilities.
There is also a cooling off period – once the loan is funded, the guarantor will receive the full sum and have around 14 days to send the money to the borrower or send it back to the lender without any fees charged. This is a security measure and gives the guarantor the freedom to change their mind if they wish.APPLY NOW