In the present day, many people find that they are unable to lead a normal life without having access to a car. You can see why this is the case and there are a number of key reasons why having access to a car is important.
- To travel to and from work
- For your work
- To care for your loved ones
- To enjoy a sense of freedom
If one, some or all of these aspects are relevant to you, you need to have access to a car, but can you afford a car? Many people are unable to buy a car outright and this means that they need to obtain finance to buy the vehicle that they are looking for. For some people, obtaining finance isn’t an issue but in recent years, it has become more difficult for many people to obtain finance.
Has a traditional lender turned you down?
Traditional lenders have clamped down on loans and there is a much higher bar of criteria when it comes to providing these loans. Many people have seen themselves turned away from banks when applying for a loan. This has then led people to try other lenders but many of these options come with a very high rate of APR. A high rate of APR means that you pay a lot of interest on top of the loan, and this means many people cannot justify taking out finance. You can’t just think about the loan, you need to think about the cost of the loan before committing to taking a loan on.
There are many reasons why you may be refused finance from a traditional lender.
- You have a poor credit rating
- You have no credit rating
Given the way that credit was provided in the previous decades, it is no surprise to see so many people with a poor credit rating. This means that actions you take years ago may be impacting on your ability to obtain finance today. This is harsh but the main lenders need to have some form of criteria to make their decisions on and the credit score is the most commonly used judging method.
If the APR is too high, you should continue your search
Even if you have been accepted for a loan but find that the APR is too high, you will need to look for other options. You should never settle for options that will see you going into debt or which leave you feeling unconfident about paying off the loan. This is why you need to look for more options and when it comes to buying a car, it may be that a guarantor loan is the ideal option for you.
A guarantor loan could be the solution that you are looking for. This is because a guarantor loan provides you with the finance that you need at a much more affordable rate of APR. The great thing about a guarantor loan is that your credit score or rating doesn’t matter. The firm has no real interest in your credit score, they just want to make sure that you meet their criteria, that you can pay the loan back and that you have a guarantor who is willing to vouch for you. The presence of the guarantor is the key factor here and the guarantor must be aware of their responsibilities.
Hopefully the borrower will pay the money back in full and the guarantor will not be called on to make payments. Of course, if the borrower does miss a payment, the lending company will turn to the guarantor, and if they are unable to pay, the matter will escalate. The guarantor will be pursed for funds and they are likely to see their own credit score negatively impacted on. This means that before obtaining a guarantor loan to buy a car, the guarantor should be aware of the implications to them.
If you are in need of a new car, but you aren’t sure how you can afford to buy one, it makes sense to look into the guarantor loan option. This could provide you with the funding you need at a fair price. Whether you need a car for work, fun or a combination of these aspects, taking out a guarantor loan to buy a car makes perfect sense.
Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.