David Allan

Experly compared by David Allan

Products Updated May 8, 2018

Car Loans With A Guarantor

If you have a history of bad or poor credit and now require a car loan then you may find you can increase your chances of getting a good deal by using a guarantor. Our experts have access to all the car lenders and finance providers who accept guarantors. We can search the market from our appoved panel to find you the cheapest deals.

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All credit types
Rated 5.0/ 5

CarFinance247 Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

Loan Amount
£1,000 - £250,000

Representative APR
6.9%

Loan Term
1 - 7 years

Loan Type
Vehicle Finance Broker

Status
Homeowners & Tenants

Finance for cars, motorbikes, vans and motorhomes. We make the process hassle-free & provide the customers with a helping hand throughout. Our aim is to get the best possible finance deal, whilst providing an efficient service of the highest quality.

Representative Example

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Poor Credit
Rated 5/ 5

Uk Credit Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

Loan Amount
£1,000 - £10,000

Representative APR
39.9%

Loan Term
1 - 5 years

Loan Type
Guarantor Loan

Status
Homeowners & Tenants

Trusted, simple guarantor loans from £1,000 to £10,000. With the help of a friend or relative to guarantee your loan UK Credit could get you the cash you need.

Representative Example

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All credit types
Rated 5/ 5

Trust Two Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

Loan Amount
£500 - £10,000

Representative APR
43.8%%

Loan Term
1 - 5 years

Loan Type
Guarantor Loan

Status
Homeowners & Tenants

With Trust Two you could borrow up to £10,000, in your own name, by asking a relative or friend to guarantee that you'll repay it. Apply online and, once you and your Guarantor are approved, on average you'll have the money within 3 days.

Representative Example

Use a guarantor to get a car loan

Get a car loan with the help of a guarantor

Get a car loan with the help of a guarantor

If you have a bad credit score, or even no credit score, and you are trying to get a car loan you could well find yourself facing some very high interest rates. This is because the loans that you will be able to get are seen as high risk loans, and so the interest rates are set very high to reflect this so that lenders make back their money sooner rather than later in case you default on the loan. As these loans are generally unsecured loans the lender is not able to repossess any of your belongings in order to recoup the loan if you default on your payments.

How does a guarantor loan work?

Guarantor loans are an alternative option

Guarantor loans are an alternative option

A guarantor loan is very much as it sounds. In order to get a guarantor loan you will have to find someone who is willing and able to act as guarantor for you. They need to be fully aware that should anything happen and you are not able to continue making payments on the debt that they will then be liable for the payments on the remainder of the debt. This is particularly important to understand on larger loans that are taken out over a longer term.

Interest rates

As you have financial backup in the form of a guarantor you will find that you will be able to get loans at much lower rates than other unsecured loans that are not from mainstream lenders. It is worth shopping around as you will find that interest rates tend to range between 40% and 50% over the term of the loan, which is normally between 1 and 5 years.

Calculator – How much can I borrow?

You may be able to borrow up to £10,000 on a guarantor loan, which is usually enough to allow you to buy a new car, however you are free to borrow less than this and any amount that you do borrow will have to be agreed with your guarantor. You should also note that this limit is likely to be higher than if you were to take out other types of poor credit loans.

This calculator will give you an idea of costs. The exact amount and APR payable will be provided from the lender subject to credit and affordability checks.

Your monthly payment will be:

£136.90

Interest on this loan will be:

£714

Annual Percentage Rate (APR):

3.7%

Total repaid will be:

£8,214

Other things you need to know

Ensure you can afford to repay the loan

Ensure you can afford to repay the loan

As with any loan you should do as much preparation as possible. You should look at your finances and figure out exactly how much you would be able to pay each month as a monthly repayment and use this to then calculate how much you can afford to borrow. You should not base your loan application amount on how much your guarantor is able to afford to repay! Once you have basic figures you can use a loan calculator to help you work out how much you can borrow, the interest rates you will pay and the length of the loan. If you do this then you are much more likely to be able to repay the loan successfully, which not only means your guarantor is not affected, it also means that your credit score will also improve.

 

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Rating: 4.6 / 5 with 25 votes

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