Guarantor Loans Frequently Asked Questions
FAQ's for the Borrower
Why do i need to get a guarantor to get my loan?
As a credit check is not being performed on you, we need to ensure that only people who are able to afford the repayment are being lent money. The fact someone is going to guarantee the loan goes a long way. This means we can negotiate for you some of the best rates on the market today. The guarantor will have to do nothing apart from sign the documents at the start, as long as you keep up the repayments.
Where is the money paid?
The full loan amount is paid into your guarantors bank account. This is for security purposes and to ensure the guarantor knows they are actually guaranteeing the loan, it also lets them know that the loan has completed.
Who can be my guarantor?
Pretty much anyone who owns their own house can act as a guarantor for you, as long as they are aged between 25 and 72 and have a good credit history. So relatives, friends, work colleagues or even your boss, basically anyone who knows and trusts you, the only exceptions are that it can not be your partner or spouse that lives with you.
When will i start paying for my loan?
Repayments usually start 1 month after the loan completes, the due date will be the same date each month as the day your loan completes until the end of the loan unless you repay it earlier, for example if your loan completes on jan 13th, your 1st payment will be on the 13th feb and every month thereafter on the 13th until your loan completes.
What if i have trouble making repayments?
It is very important you make the payments on time each month as agreed in the loan agreement, this will ensure that additional fees are not added to your account. If you do experience difficulty then contact your loan provider immediately and explain your situation, they will do their up most to help. If you do miss any payments then your guarantor will be contacted, as in the case of a default then it is their responsibility to make payment. Also if you miss payment then additional costs will probably be added to your account as detailed in the loan agreement. If you continue to miss payments and the issue can not be resolved, as a last resort, legal proceeding will be commenced against you and your guarantor with any costs to the loan company and their solicitors being added to the loan. So it is important that you contact the loan company as soon as possible that you think you may in difficulty, don't just leave it and think it will go away, it won't, and you will only make the situation worse by ignoring it. The loan companies really don't want to go down the legal route if it can in any way be avoided.
Can i settle my loan early?
Yes of course, your loan agreement will detail how your early settlement figure is calculated, which varies in different loan companies. However you should be aware that if you pay your loan off early it is possible to owe more than you originally borrowed especially in the early days of the loan.
Will i charged a fee?
You may be charged a broker or administration fee to cover the costs of setting up your loan, but this varies from lender to lender, however this will be clearly stated on the agreement and you will be notified of any fee's from the outset.
Will the interest rate change?
No, the interest rate is fixed, this helps you to manage your finances better, and not get any little surprises that could send your monthly budget out of control.
Can i change my mind?
Yes, if within 14 days of signing the agreement, you change your mind and no longer need the loan, simply contact the loan provider and ask to cancel the agreement, you will still have to repay all money lent to you in full. All necessary details will be on your credit agreement.
FAQ's For the Guarantor
Why does the applicant need a guarantor?
Cloud9loans is committed to responsible lending, and we need to ensure that only applicants that can afford the repayments get loans, the fact that a guarantor is willing to guarantee the loan goes a long way. This enables us to offer them some of the best rates on the market today.
Who can be a guarantor?
If you own your own property you can act as a guarantor for the applicant, as long as you have a good credit record and are aged from 25 to 72. We will not accept a guarantor who is a spouse or partner of the applicant, that lives with the applicant.
What does being a guarantor involve?
There is nothing for you to do as a guarantor, apart from sign the documents at the start as long as the applicant keeps up the repayments. Should the applicant miss any payments and a resolution can not be reached, you will be asked to step in and make the payments on behalf of the customer.
Where is the loan paid?
The full loan amount is paid into your bank account (the guarantor) this is a security measure to make sure that you are fully aware of the loan and that the loan has completed.
What size loan am i guaranteeing?
Depends on how much the applicant has asked for (£500 - £10000), however all details of the size of the loan are clearly stated on the indemnity form that you have to sign before funds are released. As long as the applicant makes all agreed payments on time then the loan balance will reduce over time until it is paid in full as per the the terms in the agreement, once paid in full your liabilities will be discharged. If payments are not made by the applicant you will become liable for any fees and unpaid interest on the loan as stated on the loan agreement. If the applicant asks for more money to be lent, then they will only be considered for more money if the conditions at the time are met, one of these conditions being that you the guarantor, gives your consent to the larger loan.
Can the loan be settled early?
Yes. The loan agreement has details on how the early repayment sum is calculated. You should know however that if the loan is repaid early then the total amount to be paid back can be more than the original sum lent, more so in the early days of the loan. The applicant also has 14 days from the day the agreement is signed to withdraw from the loan, should they do this then they must pay back the loan amount in full, if they don't you will become liable for the full loan amount.
Can i change my mind to being the guarantor?
Yes, in the early stages providing the loan hasn't been payed out. You need to inform the loan company that has made the applicant the loan offer in writing should you change your mind. Once the loan has paid out you can not back out from being the guarantor, then only in the event of a default by the debtor will you be asked to step in and become responsible for the payments of the loan and any other charges until the loan has been payed off.
Will the interest rate change?
No, the interest rate is fixed for the term of the loan
Will the loan show on my credit file?
You will need to be credit checked, with your consent, to confirm you are eligible to stand as guarantor for the applicant. The search will leave a footprint to show that a credit search has been performed, but that is all. The loan will not show as a debt against your name or show on your credit file as a debt, unless you fail to comply with your obligations as per the agreement, should you be asked to do so in the event of a default by the debtor.
Representative example: Borrowing £3000 over 36 months with a fixed APR of 48.6%. Monthly Repayment of £144.94. Overall the total to pay back is £5217.84
Good service, organised a £3300 loan for me, simple and straightforward
Product: Guarantor Loan
Quick and easy form, money was with me in 20 minutes!
Product: Payday Loan
Highly recommend easy application and had the cash in 20 minutes!
Product: Payday Loan
My credit history is terrible (from a divorce!) needed to pay a big garage bill for my car, cloud9loans arranged a £1800 loan for me, thanks!
Product: Guarantor Loan
Needed a bridging loan, complex circumstances for house purchase, cloud9 had cheapest rates, easy and quick service!
Product: Bridging Loan
Rejected by other companies, cloud9 helped me out when I needed help most, highly recommend
Product: Secured Loan