Guarantor loans are steadily increasing in popularity but given that the financial product is relatively new in the market, applying for one may be a bit confusing for borrowers. If you're planning to obtain financing through a guarantor loan, it pays to do your homework. Knowing the what, where and how is imperative if you want to find the best deals and also avoid the risks involved in borrowing money.

Be Sure to Assess Your Needs

Before scouting for a suitable lender, one of the first things every borrower should do is assess your needs. By knowing your needs, you ensure that you won't be tempted to borrow more than what's necessary. Remember that guarantor loans offer flexible amounts and terms making it easier for you to think that applying for a larger sum of money is wiser. It's not if you only need £1000 but your borrowed £2,000 just because you are qualified.

Borrow Only What You Can Afford

In addition to knowing your needs, you'll have to find out what you can afford per month as well. That means assessing your current budget to find out how much you can set aside for loan repayments. Make sure that you work out this part clearly because no one else will suffer but you if it turns out that you can't afford to keep up with the monthly repayments.

Don't Forget to Compare Deals

When scouting for the best guarantor loans, make it a point to compare several options before settling with one. You don't have to compare thousands of deals to find the most affordable but what can help is to use top comparison sites in the UK so you'll have a better idea of the average cost of the loan product. When comparing deals, borrowers should make sure to take into account factors such as Representative APR, hidden and upfront fees and related charges if there are any.

Avail of Free Guarantor Loan Quotes

To help borrowers, especially first time applicants, there are now more websites that offer free guarantor loan quotes. Don't hesitate to take advantage of such sites. Since the service is also for free and without any obligation, you really have nothing to lose ad everything to gain. By availing of free quotes, you'll have a better idea of how much guarantor loan costs if you borrow a certain amount at a certain repayment term.

Find a Suitable and Qualified Guarantor

To be eligible for a guarantor loan, make sure you have a guarantor who is suitable and qualified to back you up with your application. It can be anyone who is at least 21 years of age, a homeowner in the UK and has good credit rating. Family members, friends or even colleagues who is not financially link to you can be your guarantor. Once you have the guarantor secured, you can proceed to apply for your desired loan amount and term either online or in the high street.

Choose Your Lender Wisely

To ensure that you're going to avail of a guarantor loan with a reasonable interest rate, choosing your lender or provider well is the key. When looking for a lender, make sure to check details such as track record and years in business. Reading customer reviews and ratings will also help. Or you may also seek recommendations from friends and family who have already applied for a guarantor loan before.