Comparing different single parent loans in the UK and how you can get approved for each
When you’re a single parent in the UK, trying to get a loan can feel like an uphill battle. The eligibility criteria from numerous banks and traditional lenders can be too challenging to meet, but life will still demand some vital expenses for a car and home repairs and medical bills for your child. Fortunately, there are still options that you can look into to give you that much needed funding in the form of single parents loan. This guide will walk you through what you need to know about getting approved for single parents loan, the options that you can look into and how you can compare them so you can get the best deal possible for you and your present circumstances.
Single parents Loan with a guarantor
If you have been rejected for a loan or the loan being offered to you comes with alarmingly hefty interest rates, single parents loan with a guarantor may be the solution you are looking for. The financial products are unsecured types of loans which means you won’t need to offer some sort of collateral to secure the funding that you need. These loans can be a live saver for single parents who have bad credit histories. Here are some of the features of single parent loans with a guarantor that you might want to know:
- With single parent loans with a guarantor, you can borrow up to £15,500 with a payment period that can last up to five years or longer depending on the lender and your qualifications as well.
- The interest rates can vary from lender to lender but mostly hover around 50 percent. While that may sound high, it’s still a lot lower than other options especially if you have bad credit.
- You can access large amounts of loans when you have a guarantor to back up your application then you would if you were to borrow alone.
- Another major advantage with single parent loans with a guarantor is that they can be a great opportunity to rebuild your credit history as long as you keep up with your payments on time. With a new and better credit, you can easily access other types of loans for even larger amounts and better interest rates and terms.
The Guarantor The role of the guarantor in a single parents loan with a guarantor is to act as a backup in case you default from your loan which means that the person will need to cover the loan’s repayments if you are unable to. Your guarantor could be someone you know and trust in a loan deal like a family member or friend and must also be:
- Of good credit standing
- Aged 21 or over
- A homeowner
- Employed or has an income stream that can afford the loan’s repayments
- Financially independent of you (the person must not share the same bank account with you)
It’s important that your guarantor understands what his/her responsibility is on your loan deal to avoid encountering issues that could strain the relationship that you share with each other. Aside from the fact that the guarantor must take over the loan’s repayments if you can’t keep up with them, the person also does not hold any right on the money that you will receive from your loan or has any decision on where to use it. The person is simply there as a backup and must carry all the risk without enjoying any benefit in return.
Single parents Loan with no guarantor
While single parent loans with a guarantor can certainly help you secure the funding that you need, it could seriously damage the wealth of your guarantor in the event that he or she will have to shoulder your loan’s repayments. And even if you do find someone who is willing to fulfill such an important role in your loan deal, the person will still need to meet strict eligibility criteria to become accepted as a guarantor. With that being said, there are single parent loans with no guarantor that you can also look into if you need some much needed financial boost:
- Student Loans. The loans are ideal for single parents who wish to seek higher education. There are generally two types of student loans that you can avail: government student loans and private student loans. Be sure to check the eligibility requirements first to see if you are qualified.
- Home Loans. Most single parents in the UK cannot buy a home immediately with cash. Home loans make it possible for single parents to have their own house by paying a mortgage. The loans can cover large amounts for long durations for as long as 25 years.
- Personal Loans. When you’re a single parents relying on a single income to raise your family, bills can often get out of hand and if they have high interest rates, it can become an extremely difficult situation to deal with. You