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Thinking about Guarantor loans?

Been looking into guarantor loans to improve your chances of approval, but still not sure exactly what they are or how they work? We get it! That’s why today we are taking some time out to explain the key things you should know about guarantor loans. So let’s start with the basics.

What is a guarantor loan?

A guarantor is simply a loan where another person provides a guarantee that if the borrower defaults on the debt, they will assume responsibility for it. By providing this guarantee, there is much less risk for the lender, which improves the chances of approval. These loans are provided in all sorts of situations, so whether you are looking for car loans, renovation loans, or rental bonds loans, a guarantor loan may help you on your way. For other fast loans, check out Nifty today.

Guarantor loans and Nifty Loans

Nifty Loans works tirelessly to bring you guarantor loans soon! While we do not yet offer formal guarantor loans just yet, we are working on it. Very soon all of our loans will have the option to list another person as a guarantor. We believe that all different types of finance have a place in the market, which is why we are constantly trying to improve our service offering. So, keep an eye out as soon this will be an option in our application form.

That being said, we still have plenty of other products that may still meet your lending needs! But before we talk about our other products too much, let’s discuss the topic at hand; guarantor loans!

What do people use guarantor loans for?

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Residential Mortgage Loans;
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Business Loans;
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Personal Loans;
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Construction Loans;
So is a guarantor loan the same as a joint loan?

You might be wondering, are guarantor loans the same as joint loans? While they do have some common characteristics, they are not the same thing. They both involve two people having some degree of responsibility for the loan. Both options provide an increased chance of approval as multiple people can be asked to repay the loan. The main difference is who has the primary responsibility for the loan.

In the case of joint loans, the responsibilities for the debt are usually shared evenly between the parties. In a guarantor loan, the main borrower will have the primary responsibility to repay the account, and only after they have failed to do so can the guarantor be called up to help pay down the debt. For more information on joint loans, you can also check out our page dedicated to them.

Does that mean they are assessed differently as well?

Yes! Often with joint loans, both borrowers are assessed together, while a guarantor loan is assessed on a more individual basis. As a guarantor loan requires the initial borrower to be able to repay the loan on their own, they are assessed individually. The guarantor is then assessed as a type of backup as if the borrower does not have the capacity to make the payments the loan can become the guarantor’s responsibility. This will often mean that both parties involved will need to meet the lenders criteria (and that’s assuming your chosen lenders offers guarantor loans).

If you are not sure of the criteria for a given lender’s loans, you should always contact them first to see if the product is something you could qualify for.

Guarantor loans disadvantages

Risk of taking over the entire loan

As a guarantor, you need to agree that you are willing and able to take on the debt if the need arises. However, this is not something that most of them would not want or expect to actually happen. If this situation should arise, it can also impact the credit history of the guarantor as well. So if you are not careful, you could end up paying for another person’s entire loan.

Risks to your personal relationships

If you were to default on your loan and your guarantor had to take over the repayments, this could strain more than their finances. This could lead to a real strain on your relationship with them, whatever that may be. So you always need to consider the implications that such a situation would have on your friends and family.

Weighing up the pro’s and con’s

There are a number of pro’s and con’s for taking out a guarantor loan, and these also depend on if you are the primary borrower or the guarantor. So before taking out one of these loans, you should consider all the ways it may impact you. If you are ever unsure about one of these products or looking to take one out, you should always seek independent legal or financial advice.

So what does Nifty Loans offer?

Nifty is a 100% online lender that aims to offer all Australians a fair go at finance. Our small online loans are designed to cover a range of different needs and situations; including being available for people on Centrelink and those with bad credit. So while we don’t strictly offer guarantor loans yet, we do offer a range of different products that could be right for you. For a breakdown of our personal loans, you can find the basic details in the table below. You can also see more information about our loans on our costs page and how it works page.

Loan Type Amount Term (Months) Joint Loan Available  Can the loan be secured by vehicle?
Large Personal Loan $5,000 – $10,000 9 – 24 Coming Soon Often requires Security
Medium Amount Loan $2,500 – $4,600 9 – 24 Coming Soon Can be Secured

Bad credit loans instead!

You may have stumbled onto this page because you have been unable to get approved for finance on your own. Sound familiar? Getting the finance you need can sometimes be difficult, especially if your credit history isn’t the best. That’s why Nifty is proud to offer bad credit loans.

We don’t think you should necessarily be penalised for one default that happened years ago. We assess you on a number of different factors and focus on your current relationship with money. So if you are concerned about applying because of your bad credit history, don’t be, because you can still apply with Nifty Loans. For more information on our bad credit loans, you can also check out our bad credit loans!

Want to know more?

So, keep an eye on Nifty news and updates, as our guarantor loans will be arriving very soon. In the meantime, we still offer a range of other products that can suit your needs in the meantime. If you have any questions about anything in this article or anything else for that matter don’t be afraid to reach out to use on our contact page.

For more news and updates, you can also follow us on PinterestInstagramTwitter and also check out our blog which has a breadth of articles on various different topics.

Personal Loan Details

Loan Amounts $5,000 – $15,000
Loan Terms 9 – 24 months
Starting Interest Rate (APR) 11.42% (Excellent Credit)
Starting Comparison Rate 14.49% (Excellent Credit)
Ceiling Interest Rate (APR) 21.24% (Average Credit)
Ceiling Comparison Rate 45.56% (Average Credit)
Type of rate Fixed Rate
Repayment options Weekly, Fortnightly, Monthly
Monthly Fee $0
Early repayment fee $0
Average turnaround 60 minutes*
Loan Options Unsecured & secured options

Credit criteria and terms and conditions apply. Representative example: based on a loan of $10,000 over 36 months a borrower with an excellent credit history can expect to pay a total of $12,389.76. WARNING: This comparison rate is valid only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Interest rates vary subject to a full credit assessment. This represents a comparison rate of 14.49% p.a. and includes all interest and fees included in your loan repayments over the life of your loan. For our personal loan product the APR starts from a minimum of 11.42% (14.49% comparison rate) with a maximum of 21.24% (45.56% comparison rate). The minimum loan term is 9 months and the maximum loan term is 24 months. For more details and examples visit our rates and fees page.