subject: Can Guarantor Loans Help Young People? [print this page] Take yourself back to the financial industry, three or so years ago. The abundance of capital, and the looseness of qualifying criteria meant that companies were virtually begging to lend money to people from all walks of life.
The result was that obtaining credit was relatively easy, whether you were remaining faithful to your personal bank, jumping ship to go with another, or scouring the ever increasing amount of online companies.
Fast forward to the post-credit crunch era where the piles of cash waiting to be distributed have all but vanished. Any lender will tell you that they have tightened their belts, and if you are not fortunate enough to fall into the right group, your chances of obtaining credit may have vanished too.
Being under the age of 21 probably means that you fall into one of the aforementioned groups. Your credit history (if you have one) will be small, and you may well be seen as a high risk customer, simply because the lender may have little or no evidence to show that you will pay them back.
Of course, only the minority can afford to buy the modern day essentials outright, so how can a youngster obtain credit to go on holiday, buy their first car, or lay down a deposit on their first home?
One product that is becoming increasingly popular in today's market is a Guarantor Loan. By adding a homeowner over the age of 25 to an application to effectively guarantee the loan repayment, Guarantor Loan lenders are able to be more accommodating to those that may be refused credit elsewhere.
Whilst this does not mean that everyone is suitable for a Guarantor Loan, it does mean that there is a hope for those that are not seen by mainstream lenders as being the "perfect customer".
by: Jon Miller
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