Can I use a Guarantor to get car finance?
1 June 2023
By Joy Pearson
Car finance is a popular option for people who are looking to buy a car but don't have the funds to pay for it upfront. It allows you to spread the cost of the car over a number of months or years, making it more affordable. However, not everyone is eligible for ar finance, especially if they have a poor credit history. In today's, post, we will explore whether you can use a guarantor in order to get ar finance and how this process works.
A guarantor is someone who agrees to be responsible for the debt of another person. In the context of car finance, a guarantor is someone who agrees to pay for the car if the borrower fails to make the payments on time. The guarantor is usually a close family member of a friend of the borrower who has a good credit history, and they will need to provide their personal and financial details to the lender. If you fail to make a payment, the guarantor will be required to make the payment on your behalf.
Many car finance companies do offer guarantor loans as an option for people with poor credit. This is because having a guarantor reduces the risk for the lender and increases the chances of the loan being repaid. This can also be a great option for those with a bad credit or no credit history. With a guarantor, in place, you may be able to secure the finance you need to purchase the car you want.
However, it is worth noting that nor all car finance providers offer guarantor loans. Some lenders may have a strict eligibility criteria that do not allow for guarantors, while others may require a higher deposit or charge higher interest rates for guarantor loans. It is important to do your research and shop around to find a lender that offers the best deal for you, and one that suits your individual needs.
It is also worth noting the potential risks involved is using guarantor finance. If you fail to make your payments, the guarantor will be responsible for making them on your behalf. This means that if you default on your loan, your guarantor will be at risk of having their credit score affected, and they may be pursued for the outstanding debt. It is therefore important to make sure that you can afford the repayments before applying for car finance with a guarantor.
Therefore, using a guarantor to get car finance can be a great option for those with bad credit or no credit history at all. It may help you secure the finance you need to purchase a car, but it is important to do your own research and shop around to find the best deal for you. You should also consider the potential risks involved in using a guarantor and make sure that you can afford the repayments before applying for car finance.