Guarantor car finance

Can I get car finance with a guarantor?

Yes, you can apply for guarantor car finance if your credit history is less than perfect. A guarantor, typically a friend or family member with a good credit rating, agrees to cover your payments if you can’t. This arrangement reduces the risk for the lender, making it easier for you to get approved.

Consider a larger deposit or accepting a higher interest rate. Successfully managing your car finance can improve your credit score, making future finance applications more favourable. With a guarantor, you can enjoy the benefits of car finance even with less-than-perfect credit.

What are guarantor car loans?

Guarantor car finance is a type of loan where a third-party individual is involved and agrees to take over your car loan repayment if you fail to pay your balance in full. A guarantor car loan reduces the risk for the lender, as they become responsible for the credit payment if you cannot make it.

Getting car finance with a guarantor is a good option to obtain a vehicle when you cannot apply for a regular loan, such as if you have bad credit.

Do you need a guarantor for car finance?

You don’t always need a guarantor for car finance. If your credit score is good, lenders are likely to approve your car finance application even without one. However, if your credit history is poor or limited, a guarantor can significantly increase your chances of approval. A guarantor provides additional security for the lender, making them more confident in offering you finance. Assess your situation and determine if a guarantor can benefit you.

How does guarantor car finance work?

The process of getting guarantor car finance is similar to that of any other loan in the UK. Once you reach an agreement with your guarantor, fill in the application form, and our specialist will process your car finance request like any other. This credit does not require any upfront deposits or fees.

Additionally, you will not have to wait long to get financing. We work on eliminating any delays for the approval of your guarantor car finance. The decision depends on various factors, such as the guarantor’s credit rating and employment history. Typically, we get back to the applicant with a financing option for the desired car within 24 hours.

When the loan is approved, the lender is to provide the amount to the guarantor, who then transfers it to the borrower for a car purchase.

What do I need to apply for guarantor car finance?

If you wish to apply for a guarantor car loan for a car purchase, you will need to provide us with the following details:

• Name, address, phone number
• Driving licence
• Employment history
• Residential status

To apply for guarantor car finance, you need to be:

• From 18 to 75 years old
• A UK resident for at least a year
• Employed with at least £1,000 income

Guarantor requirements for car finance

When considering guarantor car finance in the UK, it is important to take into account the specific guarantor requirements.

• You cannot have a financial link with your guarantor; however, you can choose any family member, colleague, or friend.
• Your guarantor will have to provide documents on bank details, ID, or credit history and rate.
• To be eligible, the guarantor must be between 18 and 75 years old and have a good credit score and debt management history.
• A good guarantor has to be able to take over your responsibility and repay your full credit if you cannot.

Lenders tend to approve car finance when a guarantor owns a home or at least lives at the same address for years and delivers a good guarantor credit history.

Who might need car finance with a guarantor?

You might need guarantor car finance in several situations:

• Poor credit: If your credit history is poor, a guarantor can help you secure finance by providing additional security to the lender.
• Short-term loan history: If you have a limited credit history, a guarantor can increase your chances of approval and help you build your credit score.
• First-time borrower: If you are new to borrowing, a guarantor can assist in getting your application approved.
• Young drivers: If you lack a credit history due to age, a guarantor can help you obtain car finance.

What does a guarantor need to provide for car financing?

Lenders always perform a complete check before approval of guarantor car finance. That is why they require comprehensive data on the guarantor, such as

• Name, address, contact number
• Employment history
• Credit rating
• History of loan and debt management
• Details on any other guarantor loan
• Real estate or car in possession.

The outcome of this credit check defines your car financing eligibility.

Can I be a guarantor with bad credit?

You cannot usually be a guarantor with bad or poor credit history. Lenders require guarantors to have a strong credit rating and a reliable financial history. This ensures the guarantor can cover the loan if the borrower fails to make payments. If your credit is poor, lenders will view you as a risk, making it unlikely they'll accept you as a guarantor. Ensure your credit history is good and you meet all other criteria before agreeing to be a guarantor.

Can I get car finance with a guarantor and no credit check?

You cannot get guarantor car finance without a credit check. Lenders always perform credit checks to assess both your and your guarantor's financial history and reliability. These checks help lenders ensure they minimise risk. While some lenders offer soft searches that don’t impact your credit score, a full credit check is necessary for final approval. Providing a guarantor with good credit history can improve your chances of approval, but credit checks remain an essential part of the process.

How long does it take to get guarantor car finance?

Getting guarantor car finance usually takes a few days. The process involves completing an application, providing necessary documents, and waiting for the lender to perform credit checks on both you and your guarantor. Once the checks are completed and everything is in order, the lender will approve the loan. This can happen within 24 to 48 hours, but it may take a bit longer if additional information is required. Stay in touch with your lender to ensure a smooth and quick approval process.

What will happen if I fail to keep up with my monthly repayments?

If you are unable to make your monthly loan payments, the guarantor will be obliged to do it for you. That means that they will be responsible for paying your new car’s financing balance in full. However, you may be issued a County Court Judgement, which will not let you get another loan in the future.