Credit ratings and loan application may not sound like a big deal when you are young and living your life on someone else’ financial support. However, the moment you take up your own responsibility and start catching up with life, many people end up in financial trouble. Whether it is about education, housing loan, or arranging financial aid to setup your business, it is important that you know about factors that could lead to rejection of your loan application.
While guarantor loan sounds a viable option, there is no guarantee that it will always be successful if you have a good credit report. In fact, this is the only form of loan where your credit history does not play an important role. The success of your application depends on how strong your guarantor is or how thoroughly you have followed the criteria.
Following are some important steps you can immediately take if your guarantor loan is rejected:
Check the Criteria Again
Chances are that you might have missed out on something. Go through the details once again and thoroughly check the eligibility criteria set by the lenders you are dealing with. If you are just working according to a rough idea, it may not turn out positive for you. You should know for sure.
Speak to your lender and find out if you have missed out on something and immediately fix it up to improve your chances.
Find a Steady Job
For a guarantor loan, it is important that both the borrower and the guarantor are employed and have steady jobs. A person with a better and steadier job is surely the ideal customer in the eyes of the lender. As a borrower, by having a steady job you can ensure that you will be earning a certain amount every month and will be able to make your repayments without trouble.
The same applies to the guarantor. He or she must have a steady income stream — whether from a full-time job or a proper business. A consistent income stream is going to make your case stronger.
Find the Guarantor with the Right Age
The age of your guarantor must be between 18 and 75. If your guarantor is too young—despite off meeting all the other criteria—your loan application can be denied. Therefore, make sure of the age before you submit your loan application. This factor is important because the lender wants to make sure that the guarantor is mature enough to take this decision on his or her own will. Also, that the guarantor is able to keep up with the responsibility he or she has taken.
Pay the Bills
If you or your guarantor have unpaid bills, now is the right time to pay it. Your eligibility depends on your ability to repay and fulfil all your liabilities including your bills. This will portray positively and will be beneficial for your loan application.
In short, finding the right guarantor is the only thing that can help you with a successful guarantor loan. So invest your time here and meet all criteria for a smooth experience.