Having poor credit history or limited assets is not an issue for some types of loans, such as guaranteed loans. If you will be able to get a guarantor with good credit score, you are good to go… but how can you find one? Consider these tips:
Know the guarantor requirements first
Find a guarantor that is based on the same location as you are in case you need someone to guarantee your house. This second person has to sign papers and attend meetings. You also have to inquire about the credit rating required, as well as the kinds of assets he or she must own. Request the lender to provide you with a checklist of requirements for your loan guarantor.
Make a list of possible guarantors
Before you go on talking to possible people who can help you with your loan, you must first create a list of prospects – those who are easy to deal with and those whom you think have assets or good credit standing. Be sure about your list so you will not waste your time discussing your plans with each of them. Rank them from 1 to 10. They can be your parents, siblings, relatives, friends, and even co-workers. Start from the person whom you think is the best (or the most financially capable) from the list.
Arrange to meet each of them
If some of the persons on your list are not the ones that you see every day or not in close proximity to your home or office, set an appointment with them. Do not disclose your reason over the phone; it is better to discuss your plan in person so you can gauge their reactions. Think of a better way to tell them about your plan to apply for loan so that the possibility of getting the approval of one of them is likely.
But before you meet them, it is better if you are already sure about the financial institution where you hope to get a loan. Get some details ready as well, like the amount of money that you want to borrow, the terms of payment, the interest rate, the APR, and others. You have to know all these so that when you are asked by your possible guarantors, you have ready answers. This will also reflect that you are somehow prepared for your plan. More important, you have to tell them where your funds for the monthly payment will come from so you will give them peace of mind.
Ask for support courteously
Ask each of your potential guarantors about the possibility of backing you up in your loan application in a very polite way. Explain to them why you need the loan and why it is the only solution you have at present. You should be able to establish your need. Prepare yourself to get a ‘No’ answer, especially if they know that the risk is too high on their part because of your bad credit history.
It is not easy to find a guarantor, but with the proper steps and honest and clear explanations, one of the people on your list may agree to support you.