Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
There are certain expenses in life that are far too great for our bank accounts to handle. Whether it’s buying a house, a car, or even paying for a home improvement project or a big family vacation, expenses like these can be pretty hefty. In these scenarios, taking out a mortgage, auto loan, or personal loan can help provide us with the funds needed to cover these expenses when our own finances aren’t adequate enough.
But what if you can’t get approved for a loan? What if your credit score is too low or your financial history is a little shaky? What will you do if your lender says no?
If you find yourself in this situation, you may want to consider a guarantor loan. This type of loan requires a guarantor to co-sign the loan contract. Basically, the guarantor backs up the loan and promises to take over payments if you ever default.
A guarantor loan is an installment loan that you can borrow and repay over time if you have someone to cosign your application, such as a trusted family member or friend. Typically, these loans are for $10,000 or less and they come with higher interest rates than other credit products because people who apply for them often have bad credit or spotty financial histories that prevent them from qualifying for regular personal loans.
You (and your guarantor) can prepare for the guarantor loan approval process by:
Here are the general requirements to get a guarantor loan (for you and your guarantor):
When picking a guarantor to co-sign on your loan, be sure to choose a trusted friend or family member. Ideally, the guarantor you pick should be one who is already very responsible with their own finances and loans, has a track record of making timely payments, and has a healthy credit score.
A guarantor is someone who agrees to take responsibility for your loan payments if you can’t afford them, which is why they must be trustworthy and financially prepared. Here are some other important things to look for in a guarantor:
Before getting a guarantor loan, consider the potential ramifications of not being able to follow through with your payments and how that could affect the guarantor and your relationship with this person.
Not all lenders provide guarantor loans, so it’s in your best interests to find a specialized lender. Conventional lenders are not in the business of providing guarantor loans, nor do they typically provide bad credit loans to those with poor credit scores. For this reason, you’ll have to do some research to find a lender who deals specifically with subprime borrowers who need some sort of assistance getting a loan with the help of a guarantor.
That said, it’s important to be wary of the type of lender you work with. Some lenders in the subprime lending sphere may not have the borrowers’ best interests in mind, which can put both you and your guarantor in a precarious position if you’re not careful. It’s not uncommon for borrowers with a poor credit history to get scammed by lenders without even realizing it until it’s too late.
You can get a sense of whether or not a lender is shady right off the bat if they promise to approve your loan without even looking at your credentials or the credentials of your guarantor. Steer clear of lenders who make these outrageous promises.
There are plenty of reasons why you might have trouble getting approved for a traditional loan and may have to resort to a guarantor loan:
Anyone of the above-mentioned scenarios may be a reason to apply for a guarantor loan.
The great thing about getting a guarantor to cosign your loan is that your credit score won’t be taken into consideration. This is why this type of loan is such a great option for many Canadian consumers who are dealing with bad credit or other financial issues.
If you’re looking to apply for a guarantor loan, you need to find someone who is willing to be your guarantor. Whether it’s a lifelong friend or a close family member, it’s up to you to find someone. As mentioned before, you’ll need to do your due diligence to make sure you choose the right person, even if you have people in your life who are willing to step up and be your guarantor. But, not everyone will necessarily be qualified to take on this role.
If you can’t find a guarantor, it may be in your best interest to seek out another form of financing. Depending on the reasons why you want a guarantor, here are some alternative options:
Credit counselling – If you’re unsure about what to do to improve your credit, you can work with credit counselling services that will educate you on what you need to do to improve your situation.
If you’re in need of a loan but can’t get one on your own, guarantor loans may be a viable option. To help you find the right guarantor loan and work with a reputable lender, be sure to get in touch with Loans Canada today!
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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