There's lots of different products which have risen up to try and fill the void, including controversial payday loans.
However, if you are looking for long term borrowing, a payday loan isn't appropriate so you will need to consider something else. This is where loans with a guarantor step into the spotlight.
We take a look at unsecured guarantor loans and what you need to get one.
How do guarantor loans work?
If you have a few black marks on your credit file or even if you just haven't yet built up much of a credit history, could be providing difficult to find a lender willing to offer you finance. And whilst it's important to make sure you don't overstretch yourself, it can be difficult to make big purchases - such as a car - without borrowing the cash.
Loans with guarantor work by the applicant supplying the details of some-one who is willing to act as a back-up and pay the debt if all goes wrong. This reduces the risk for the lender.
With these types of loans guarantor simply means some-one who can be called on where necessary, they wouldn't normally be involved in repaying the loan.
What are the best guarantor loans?
The need for guarantor loans online is rapidly increasing, with a rising number of individuals unable to access mainstream credit. This means there are even more cheap guarantor loans available from a wide range of lenders.
If you need to borrow money quickly - perhaps you want to take advantage of a great deal or you don't want someone else to nab your dream car - there are same day guarantor loans on the market. These companies promise to have the money in your account within hours of applying.
Many lenders may ask for your guarantor to be a property owner. However, it is also possible to find non homeowner guarantor loans. If you look through the available loans non homeowner ones will not be as common, but they can be found if you do your homework.
Your guarantor will normally also need a decent credit history and if they are a homeowner, enough equity in their property to cover what you are borrowing. The lender will still also want to see that you can afford to meet the repayments.
There are many companies who seem to offer guarantor loans but upon further investigation are simply brokers. This can lead to a frustrating cycle and in some cases the applicant may even be asked to pay a fee. Therefore you should attempt to only apply through the direct lender, their offers are far preferable and are likely to lead to a much quicker offer and decision.
If you stick to direct lender guarantor loans low APR rates will also be easier to find. Although they aren't as extortionately priced as a payday loan, they will typically be higher than mainstream credit. This is because the lender is taking on an additional level of risk.
To find the one which is right for your circumstances, you should compare guarantor loans online this way you will quickly find the loan that's right for you.