This is a difficult question to answer.
Of course, like any other unsecured loan a guarantor loan will not be as cheap as a typical high street loan that you would get from a building society or bank. On the other hand, as they allow for a large amount of poor credit from the applicant, the fact that you will be accepted for finance is reason enough to go with one.
They are a cheaper lending option than payday loans, of that there is no doubt. Some payday loans charge an APR of 3000% whereas a standard guarantor loan from the likes of Whitestar Loans would mean you would only have an APR in the region of 44.5%.
The other major difference is that a guarantor loan can be taken over a longer period of time with loan terms ranging from 1 year to 7 years, whereas a payday loan can only be taken over a maximum 30 day period.
There are a number of guarantor loan lenders such as the Loan Arrangers who will allow borrowers to take loans of up to £12,000 but the majority of loans are n the region of £5-£7,000 but nearly all lenders will allow the applicant to borrow more (or top up) their loan after 6 months, so even if your loan is capped at say £5,000, you have scope to increase that to the maximum of £12,000 after you have made repayments on time each month for a minimum of 6 months.
Every single guarantor loan will be assessed for affordability as it is important that the borrower can prove that they can afford the loan and apart from a credit score on the guarantor (not the applicant) that's all there really is to it.
Of course, like any other unsecured loan a guarantor loan will not be as cheap as a typical high street loan that you would get from a building society or bank. On the other hand, as they allow for a large amount of poor credit from the applicant, the fact that you will be accepted for finance is reason enough to go with one.
They are a cheaper lending option than payday loans, of that there is no doubt. Some payday loans charge an APR of 3000% whereas a standard guarantor loan from the likes of Whitestar Loans would mean you would only have an APR in the region of 44.5%.
The other major difference is that a guarantor loan can be taken over a longer period of time with loan terms ranging from 1 year to 7 years, whereas a payday loan can only be taken over a maximum 30 day period.
There are a number of guarantor loan lenders such as the Loan Arrangers who will allow borrowers to take loans of up to £12,000 but the majority of loans are n the region of £5-£7,000 but nearly all lenders will allow the applicant to borrow more (or top up) their loan after 6 months, so even if your loan is capped at say £5,000, you have scope to increase that to the maximum of £12,000 after you have made repayments on time each month for a minimum of 6 months.
Every single guarantor loan will be assessed for affordability as it is important that the borrower can prove that they can afford the loan and apart from a credit score on the guarantor (not the applicant) that's all there really is to it.