Guarantor loan, what's the lowest APR out there?

111222

Lowest I can find is step one finance at around 24% APR if I've understood it right, does anyone know of any company with a lower APR?

[Deleted User]

The guarantor can take out their own lown for 3-4% and give it to the other person.

Much cheaper.

soolin

111222 wrote: »

Lowest I can find is step one finance at around 24% APR if I've understood it right, does anyone know of any company with a lower APR?

Surely cheaper to get the guarantor to take their own loan out at a better rate and loan the money to the person needing it. Either way the guarantor is liable then if borrower doesn't or can't repay.

111222

I see what your saying, it's a family member though and they'd like to have as little to do with it as possible if you get what I'm saying, even though they'd still be liable if I took out the loan. It's only for £2000.

Anything cheaper, 24% seems pretty cheap already so I doubt it.

[Deleted User]

They'd be mad to do it as a guarantor loan. They have no control over the payments, which are more costly than anywhere else, and their credit file is in your hands.

If they really want as little to do with it as possible, they should give you the money and rely on you paying them back.

Everyone's a winner and they don't risk their credit file for £2k.

Exodi

111222 wrote: »

I see what your saying, it's a family member though and they'd like to have as little to do with it as possible if you get what I'm saying, even though they'd still be liable if I took out the loan. It's only for £2000.

Anything cheaper, 24% seems pretty cheap already so I doubt it.

You must appreciate, frequent MSE users have personally witnessed thousands upon thousands of people coming onto this forum complaining because they didn't seem to fully acknowledge the fact that they were liable if the original debtor failed to pay until, well, they were liable.

You then have the fact (and I will generalise here) people that need guarantor loans can't get loans themselves and are FAR more likely to not honour their commitments to repay the loan. To be honest, I'm somewhat concerned about your comments 'only £2000' (if it's only £2000 to you, you'd surely have no problem saving this amount instead?) and "24% seems pretty cheap" (if I was offered a loan at half of that my head would fall off my shoulders, if you think 24% is cheap, I can't imagine your credit history...)

foxy-stoat

Unfortunately the guarantor has everything to do with the loan - taking out a 24% loan will end up costing the guarantor at some point.

Get them to set up a standing order for the monthly amount and draw up a simple loan agreement.

I loan £2000 to loser one - paying back £125 for 16 months or whatever.

Dont charge them interest, if you get your money back then its a chicken diner !

dealer_wins

Dont take a guarantor loan out, its not fair on the guarantor who will end up paying for it all.

MEM62

111222 wrote: »

Lowest I can find is step one finance at around 24% APR if I've understood it right, does anyone know of any company with a lower APR?

If the only loan you can get is a guarantor loan then you should not be borrowing money. The business model for these operators is that they effectively lend top someone with a good credit standing (the guarantor) and charge sub-prime rates.

No matter how desperate you think your need is, guarantor loans should be avoided at all costs. Find another way of resolving your financial issues.

Clive_Woody

111222 wrote: »

24% seems pretty cheap

24% APR won't seem pretty cheap to the guarantor when they inevitably have to repay the loan - considering most likely they could have got a loan with a much much lower APR.

stripeyfox

111222 wrote: »

I see what your saying, it's a family member though and they'd like to have as little to do with it as possible if you get what I'm saying, even though they'd still be liable if I took out the loan. It's only for £2000.

Anything cheaper, 24% seems pretty cheap already so I doubt it.

A guarantor loan isn't really "your" loan at all. They are lending to the guarantor. They are the backstop when the borrower inevitably ends up in difficulty. It's all very friendly at the start but the road to hell is paved with good intentions.

In answer to your original question, I would imagine 24% is probably "reasonable" for this type of loan. But it is a really really bad idea to take it out. It will inevitably cause you problems with the family member who will end up paying for it. If you genuinely think you can afford to borrow 2K then ask the family member to borrow it from their bank and you pay them back. It's exactly the same thing but cutting out the loan shark in the middle.