How to get the best deal on a £15,000 guarantor loan
£15,000 is the most you can borrow with an unsecured guarantor personal loan. Here's how to give your application for this substantial sum the best chance of success.
If you have a poor or limited credit history and can’t get a traditional personal loan, you could consider a guarantor loan. You can ask a friend, relative or work colleague to be your guarantor if they have an excellent credit rating and are willing and able to make your repayments in case you cannot.
Due to the lower credit rating of the applicant and the increased risk involving a guarantor as a third party, guarantor loans are only offered up to £15,000. Only a few lenders actually offer £15,000 guarantor loans, with many capping loans at £10,000 or below.
A £15,000 loan is a huge amount of money and could transform your life, whether you use it to fund a wedding, home improvements or to consolidate your existing debts.
When it comes to selecting a guarantor who is comfortable to financially back your loan, they would need to be a homeowner with an excellent credit score. They may also need to have a decent amount of equity in their home, so a first-time buyer with a short period on their mortgage may not be eligible.
With £15,000 being such a large amount, in order to keep monthly payments affordable, most of us would require a longer loan term. Most guarantor lenders expect the £15,000 to be paid back over a maximum of five years. However even over a term as long as this, the monthly repayments are still likely to come in at more than £450, with the best guarantor loan interest rates currently around 30%.
Compare guarantor loans
How to compare £15,000 guarantor loans
Consider each of the following key factors when comparing lenders that offer £15,000 guarantor personal loans:
- Total payable. Along with the loan amount, how much will you pay back in total including interest and fees. This is often the most important factor to focus on when comparing £15,000 loans.
- Available loan durations. Most lenders require the guarantor loan is paid off in a maximum of five years. It is likely you will need the longest term possible to make the repayments on a £15,000 loan affordable.
- Rate. The interest rate is obviously a very important factor. Be aware the advertised “representative APR” may not be the rate you are offered by the lender. This rate is usually reserved for applications that the lender deems to be the lowest risk.
- Eligibility. Each lender will have its own eligibility criteria for both you and your guarantor to meet. For a £15,000 guarantor loan, your guarantor will need to be a homeowner with an excellent credit rating.
How to get approved for a £15,000 guarantor loan
Most lenders aim to process and approve your application the same day. However, there are factors which can delay the application, or even result in it being rejected. If both you and your guarantor make sure your application form is accurate and honest, you will increase your chance of a speedy approval.
- Be realistic about what you can afford. The average £15,000 guarantor loan requires monthly payments over £450. Are you confident you can meet this amount every month? Does your guarantor realise the monthly amount they would be expected to cover if you couldn’t make a payment?
- Make sure you are accurate and honest in your application form. You and your guarantor must be open with each other about your respective finances. Also double check that the application form is correct to avoid delays.
- Check the minimum eligibility criteria. Make sure both you and your guarantor fulfil the separate criteria, such as minimum age, credit rating and that you don’t have shared finances.
- Choose your guarantor carefully. If the lender likes your guarantor, you will stand a much better chance of getting your loan quickly.
- Prep your guarantor. Make sure your guarantor is aware of the responsibility they are taking on, and is on hand to complete their part of any online forms and, if necessary, available to speak with the lender over the phone. It’s also the guarantor who actually receives the funds from the lender, so you’ll need them to transfer the funds to you.
- Be available. Both you and your guarantor need to be able to take a phone call from the lender or to respond to emails during the approval process.
Calculate how much you will have to pay monthly and overall on a £15,000 guarantor loan with our handy table.
|Interest rate of 29.9% fixed p.a.||Interest rate of 34.9% fixed p.a.||Interest rate of 39.9% fixed p.a.|
|3 year term||£607.93 monthly|
|4 year term||£509.54 monthly|
|5 year term||£453.08 monthly|
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