In the United Kingdom, the concept of The Guarantor loanshas been quite common. The need of the guarantor loan happens when you are going to apply for a loan. If you are not familiar with the function of the guarantor loan, you may need to learn about it.
About the guarantor loan
The guarantor loan commonly refers when a borrower is about to apply for a few hundred or thousands pounds from a lender. The process of the loan application sometimes needs a guarantor. The involving a guarantor in theloan is part of the requirement to get approval from the bank or the financial institutions. The guarantor on your loan application can be a friend of a family member. Otherwise, it could be your colleague too. As long as they agree to be the guarantee repayment, you could have anyone to be the guarantor. The guarantor will be the third party in the loan application. She or he should be willing to handle the repayment when you, as borrowers, cannot repay the loan. In the conclusion, the guarantor loan will involve three parties; they are, the borrower, the lender, and the guarantor. They are all connected.
The worst scenario of having a loan is that you cannot repay it fully. The regular loan usually takes your assets which valuable as repayment for the loan. As the loan which involves three parties, Guarantor loansmay have different method before the lender takes your property or vehicle.
The first attempt from the lender when you do not pay it on time is collection practices. The collection practices are done as the communication from the lender with the borrower and guarantor to pay the loan. It can be done through email and text message reminder. It is usually sent in the days leading up to repayment.
The lender of the guarantor loan will ask for the extra charger when you miss the repayment and fail to respond the email and phone call. The lender will increase the charges on your account. Generally, it charges up to 30 Pounds every missed repayment
Arrangement or pay plan
The lender will contact you when you do not pay the loan on time. When you are in the financial situation, you could contact the lender. You and the lender can play a new repayment method.