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Guarantor Personal Loans
Going guarantor? Here’s what you should know
If you are looking for the right personal loan but think you won’t qualify, guarantor personal loans are an option to consider. If you have bad credit, are self employed, or don’t have any assets to backup your loan with, you may find it hard to get approved. In this case, a family member or close friend can jump in as a guarantor and help you get the right loan. Having a guarantor on board can help you either get a loan in the first place or lower your interest rate.
Here’s a quick rundown of what you need to know if you’re thinking about applying for guarantor personal loans.
How a guarantor loan works
As a first step, guarantor personal loans require you to find someone who will act as a guarantor for you. This person will then co-sign the loan agreement with you, taking part of the repayment responsibility onto them. When assessing your application, a lender will take the guarantors situation into consideration, as well as your own.
By throwing their credit score and assets into the mix, a guarantor can greatly increase your chances of getting approved by reducing the risk to the lender. You may also be able to secure a better interest rate if the guarantor’s credit history and financial circumstances are better than your own.
Guarantor Personal Loans FAQs
What are guarantor personal loans?
A personal loan is a form of finance that you can take out to pay for unexpected bills, personal expenses, a big holiday, or even car repairs. However, there may be circumstances where you can’t get approved for the loan you want because you may not meet the criteria. In this case, you may opt to apply for guarantor personal loans instead. Basically, this means a guarantor will sign the loan agreement with you and take on part of the responsibility to repay it.
What is a guarantor?
A guarantor is a third party (often a family member or close friend) who agrees to co-sign a loan agreement with you. This means their finances or assets will act as security against the loan. So, if you can’t make your repayments, they will be responsible for covering the cost.
Do guarantor personal loans hurt your credit score?
When you submit a loan application, a lender will perform a credit check. Any credit check will pull a hard enquiry on your credit report. This will leave a mark on your records and may adversely affect your credit score if there are multiple checks in a short period of time.
However, one loan application is unlikely to seriously hurt your credit score. Timely payments over the upcoming months can also help to improve your credit ranking.
How much can I borrow with a guarantor personal loan?
There is a chance that you will be able to borrow more with a guarantor personal loan. Your guarantor acts as extra security against your loan and therefore, your lender may be able to offer you a higher loan amount. However, this will depend on your lender, your guarantors credit score, and if they are willing to provide an asset as security against your loan.
Can I get guaranteed approval for personal loans?
We can’t promise your loan will be approved without having seen your personal case. At Jacaranda Finance, we look at every single application individually and decide what’s best for our customer. We will look closely at your personal finances and then assess your guarantor as well. Our decision will be based on both of you.
How do I get out of a guarantor?
Naturally, being a guarantor carries a big financial and legal responsibility. Typically, once you sign the loan contract it is difficult to back out of the agreement. As a result, you should always take time to consider your situation carefully before agreeing to be a guarantor.
If you are not happy with your current loan setup, get in touch with your lender and see what changes can be made.
How Jacaranda Finance can help
At Jacaranda Finance, we provide personal loans up to $10,000 entirely online. Although we don’t typically provide guarantor personal loans we may be able to depending on your situation. If you wish to apply for a guarantor personal loan, please get in touch with our team directly.
Ultimately, at Jacaranda we believe in giving every applicant a fair go at accessing the finance they need. As a result, we look at more than just your credit score when assessing your application. So, you may still be eligible for a personal loan with us even if you have been rejected by other lenders!
Why apply with Jacaranda?
- 100% online. With us, you can skip the queue. You can apply for our online loans at any time of the day from anywhere in Australia.
- Fast outcome. We won’t let you wait for long! You will receive your outcome within 60 minutes (if you apply during AEST business hours).
- Ethical lenders. We assess your financial situation thoroughly and offer you the best loan possible. At Jacaranda, we care about your finances. We will make sure that we don’t lend you money you would struggle to repay.
Steps to apply
Our loan applications are 100% online and super fast. With three easy steps, you can apply for a loan and get approved within minutes. (If you apply during AEST business hours, you will receive your outcome within 60 minutes.)
1. Fill in your details
Choose the right loan amount and loan term by playing with our loan slider. Once you are satisfied with the result, hit ‘Apply Now.’ You’ll then be taken to our online application. Here you’ll be required to give us some personal and financial information. When you’ve filled out all the required fields click ‘Submit.’
2. We assess your application
Now our team gets to work. We will be in touch if we need any further information, otherwise, we will assess your case and see if we can make you an offer. If so, we will let you know straight away. If not, we may be able to refer you to another lender that is more suitable.
3. Receive your money
We will send you a loan contract to sign and once we get it back, your funds will be on the way! If your bank has NPP-enabled payments, the money could be in your account and ready to use in just 60 seconds.
Eligibility requirements and documents needed
To be eligible for a loan we require you to:
- Be at least 18 years of age;
- Be an Australian citizen or a permanent resident;
- Provide an online banking account with at least 90 days of payment history;
- Have a stable and ongoing source of income.
To ensure your application runs smoothly, there’s a few documents you should keep handy. These include your driver’s license, online banking logins, and personal details (e.g. DoB, address etc.). That’s it! During the assessment process, we may request more information from you. Yet, if that’s the case, we’ll be in touch.
To read more about guarantor loans visit the Moneysmart website.