Do I need a guarantor loan?
There could be any number of reasons why you choose to take out a loan. You may need it for a sudden, unexpected expense, such as to fix a faulty boiler or a broken-down car. Or perhaps you want to cover the cost of a home improvement project. Whatever the reason, it’s vital that you weigh up all your options before you make a final decision.
A guarantor personal loan could be right for you if you have poor credit or have been declined by other lenders. But guarantor loan companies aren’t the only answer – and that’s where 118 118 Money comes in.
We don’t offer guarantor loans, but you can borrow between £1,000 and £5,000 over 12 to 36 months without a guarantor. And, if you don’t think a loan is what you need, a 118 118 Money Simple Interest Rate Credit Card may prove the ideal alternative. With a credit limit of up to £1,200 and the ability to be flexible in your repayments, it’s certainly an option worth exploring.
What are the key differences between a credit card and a guarantor loan?
To decide which is right for you, it’s important that you understand the major differences between guarantor loans and credit cards:
|
|
Credit Cards
|
Guarantor Loans
|
|
Representative APR
|
Tends to be lower than guarantor loans
|
Typically higher than credit cards
|
|
Repayments
|
Repay the balance in full, make a minimum monthly repayment or choose any amount in between
|
There will be a fixed monthly instalment for you to pay, although you may be able to repay early if you can afford to
|
|
Credit Limit/Amount
|
A continuous line of credit, as long as it’s within the agreed limit
|
The agreement stops once the loan amount (plus interest) is repaid in full
|
Guarantor loans vs no guarantor loans?
One requires a guarantor who can repay the loan should you default on the payments. The other, a non-guarantor loan, is solely the responsibility of the borrower to repay.
Guarantor loans can be aimed at those with a less than perfect credit score, as such they do typically come with higher APRs when compared to a non-guarantor loan. This is partly because those with poor credit can be seen as a high risk versus someone with a good credit track record.
You may also be wondering if a guarantor loan can help to potentially improve your credit score? All types of credit have the potential to improve your credit score, but they need to be used as stated in the terms and conditions and payments have to be made as agreed with the lender. You also have to ensure you keep up with any other credit commitments you may have.
A 118 118 Money Simple Interest Rate Credit Card can also help to improve your credit score. As with other credit cards, you must make at least the minimum repayment monthly.
Am I eligible to apply?
Think a credit card from 118 118 Money might be a more suitable option than applying with a guarantor loan lender? Before you apply, you can use our eligibility checker to see if you’ll be approved – and it won’t affect your credit score, full applications require a credit search. If you choose to go ahead with your application, to be considered for a 118 118 Money Simple Interest Rate Credit Card, you’ll need to:
- Be a UK resident
- Be aged between 18 and 70
- Earn at least £8,400 a year
- Not be in arrears with another lender
- Have had no default payments in the past six months
As part of the eligibility check, we’ll also need a few basic details, such as your:
- Name
- Email address
- Date of birth
- Current employment and residential status
- Net monthly income
- Outgoings
- Home address
Will my credit score be affected when I apply?
It doesn’t matter if you’re seeking a guarantor loan or a credit card – lots of applications in a short space of time can have a negative impact on your score. But our eligibility checker is a way to find out if you’ll be approved before you apply – and it won’t have any effect on your rating.
If you’re accepted, making your repayments in full and on time every month can actually improve your score, as it proves you can use credit responsibly. Of course, failing to do so can have the opposite effect and lower your score. And, in the case of a guarantor loan, it is likely to mean your guarantor has to make the repayments for you.
Will I need to go through a credit check?
Yes. An application for a small or large loan with or without a guarantor, credit card or any financial product will involve the lender doing a credit check. If you apply for the 118 118 Money Simple Interest Rate Credit Card, we’ll carry out a check so that we can see your borrowing history. This will help us to decide whether to approve your application.
You can always check your credit report before you apply and don’t forget to use our eligibility tool first, which won’t have any impact on your credit score. Should you then decide to complete a full application, we will conduct a full credit search which will be visible on your credit file.
What if I need help or have questions?
We aren’t guarantor loan lenders, but if you have any questions about our other loans or credit cards, you can always get in touch with our Customer Services team.
All you have to do is call 02920 548 118, with lines open 8am-7pm Monday to Saturday and 9am-5pm on Bank Holidays, closed on Sundays. Alternatively you can use our web or app chat.
*02920 numbers are charged by your provider as a UK national number.
Apply for a guarantor loan alternative with 118 118 Money
Decided that a credit card is a better fit than a guarantor personal loan? Use our eligibility checker before you apply, without affecting your credit rating.
