At ChooseMyCar, they hate the idea that a bad credit score, or poor credit history, would stop you taking advantage of great car finance deals, or owning your ideal used car. Life is full of twists and turns, and a poor credit rating doesn’t mean you’re someone not capable of paying for, and owning, a vehicle. They know this which is why, as experts in bad credit car finance, they offer various forms of finance options for people with less than excellent credit histories. One of these methods is called guarantor car loan finance.
In today’s blog, we’re going to be looking at why a guarantor loan for a car finance plan may work for you, and people with a spotty credit history. Once you’ve got this type of loan term in place, you can begin to search for your ideal used car here at ChooseMyCar.
Why Guarantor Car Finance Can Help You Secure Your Dream Car, Despite Personal Circumstances
Guarantor loans for car finance involve a guarantor, who must have a good credit rating, a history of making payments on time and be familiar to you, among other criteria, guaranteeing that your loan payments can be paid. They provide more security for the lenders because they can go to the guarantor for money if they require payment.
Oftentimes, guarantors are people that are related or are close to you by way of marriage, or long-term partnership. This is why finance agreements are so popular and can help you get access to finance for your dream car, because, for a lot of people, the guarantor is virtually always willing to put their name to the finance application process, especially if they are family members, such as a mother or father.
In our experience, this type of finance option is very popular as it is a quick way to access finance. Most of the time, people have fallen on financial hardship or simply not had the opportunity to build up a strong credit score. That’s not their fault necessarily and guarantor car finance removes the obstacle of bad credit.
Other key features and benefits of this option relate to the amount of money you can borrow. While this needs to be thought through, the guarantor with the excellent credit rating can lend you more money than you initially needed. In general, a panel of lenders tends to allow this, provided there is sufficient reasoning, and security, in place, such as proof of income. This feature can allow you to view a variety of deals for bigger, or more practical, cars which is ideal if you have a family, and need the extra space to take them to school, for instance.
Long term, you can begin to create a strong profile by paying back the loan repayments on time, allowing you to have the car and improve your financial situation at the same time. This can allow you to, in the future, take out personal loans on cars, or bigger purchases such as housing, because you have proven your ability to use your monthly income to pay off the loan.