Guarantor and Finance.

OffRoadOnly

Not sure if this is the correct section but i think it is?


Anyway

I have applied for finance, but they need a guarantor who owns a home(due to the nature of the financed item).

I have a guarantor but does the direct debit need to be set up from their bank account or can i use mine?

CLAPTON

which company are you using
how much are you borrowing
what is the APR


who is the guarantor (family, friend etc)

paddyrg

Typically the DD is your account, you're paying the loan, but they have a lein on the guarantor's house if you stop paying.

Guaranteed loans are exactly the same as (but a more expensive version of) your guarantor taking out a loan for you. They face exactly the same risk if you don't repay, but higher interest rates and fees.

OffRoadOnly

CLAPTON wrote: »

which company are you using
how much are you borrowing
what is the APR


who is the guarantor (family, friend etc)

Unsure of company will find out tomorrow(they called when i was in work so my dad passed the message on).
£3700
14.5%

Family

paddyrg wrote: »

Typically the DD is your account, you're paying the loan, but they have a lein on the guarantor's house if you stop paying.

Guaranteed loans are exactly the same as (but a more expensive version of) your guarantor taking out a loan for you. They face exactly the same risk if you don't repay, but higher interest rates and fees.

Thanks, if the DD is in my account ill do it but if not i wont.

Ill pay it off in less than a year, i would save up to buy it but it will be gone by then

CLAPTON

be very very careful

only deal with any company AFTER you have a copy of the loan proposal and do NOT pay anything in advance or provide any bank details or CC details

why can't your your father get a loan for you himself and you pay it off?

paddyrg

Check with the lender, but it makes sense for it (DD) to be in your name. Then they will hit your account for the cash, and hit the guarantor if a payment doesn't clear (just be aware they will tend to be pretty prompt to do this, so always have the cash surplus in the account in there in plenty of time!)

Also, do check that you can overpay the loan - some you can, some less so.

OffRoadOnly

decided not to do it, they want everything to be in the home owners name even the direct debit. If it was my direct debit then maybe.

paddyrg

Hmm a guaranteed loan is really just a loan to another person with your name at the top - generally a bad idea anyway, you may have dodged a bullet.

gilligansyle

There are a few firms who work this way and it seems that they are getting more canny in the way they work. Basically these loans are in effect loans to other people, but you get the cash, you pay the money back, and they take bank details for the other person in case you default. Many years ago my Dad guaranteed my mortgage, as I was under 21, but they never asked for any of his bank details.

I think you've been lucky to get out of this one.