How Many Guarantor Lenders Are There in the UK?

Posted byRay Bohringer | Category Blog | Date 24 October 2018

There are around 12 official guarantor lenders in the UK, making it quite a small but effective industry. The first lender was Amigo loans which emerged in 2005 and the other lenders followed suit.  You can find statistics about the industry here.

 

guarantor-loans

 

Guarantor Loan Comparison is an aggregator and comparison website for the main lenders in the country, helping you compare rates and find the best lender for you. If you have any queries about the industry, please contact our founder at guarantorloancomparison@gmail.com 

Please find a list of lenders below, the rates they offer, the loan amounts and who they can lend to:

 

Lender Rep APR Loan Amount Tenants or Homeowners*
Amigo 49.90% £500 to £10,000 Both
UK Credit 39.90% £1,000 to £10,000 Both
Buddy Loans 49.90% £1,000 to £7,500 Both
George Banco 49.70% £1,000 to £15,000 Both
Trust Two 49.50% £500 to £10,000 Both
Bamboo Loans 49.70% £1,000 to £8,000 Both
1plus1 47.80% £500 to £10,000 Both
TFS Loans 39.90% £1,000 to £15,000 Just Homeowners
SUCO Loans 39.90% £1,000 to £15,000 Just Homeowners
Guarantor My Loan 48.9% £500 to £10,000 Both
Lendfair 29.90% £500 to £10,000 Both
MASA Loans 49.70% £1,000 to £7,500 Just Homeowners

Key Points

Tenants and Homeowners

There are some guarantor lenders that state that they will only lend to individuals that have a guarantor who is a homeowner. This is because in order to get a mortgage and own a home, you would have likely been through the process of demonstrating a strong, stable income and reliable credit score. Also, having a flat or home gives you a permanent residence that the lender can also contact in a last case scenario.

So having a guarantor as a homeowner is always useful and will maximise your chances of approval. Over time, they have been more and more lenders open to lending to borrowers who have a tenant guarantor or non homeowner guarantor loan – since homeownership is now less common and people can still have good credit stores and income despite being in rented accommodation.

Interest Rates

The interest rates range from 29.9% up to 59.9%. The Lendfair product at 29.9% is a very unique product where the lender is trying to be more competitive.

However, it is noted that the lowest rates are typically available for those customers with a good credit history to begin with and a very good, reliable guarantor.

For those riskier customers with tenant guarantors and slightly weaker credit histories, one can expect a higher rate of interest up to 59.9% to mitigate the potential risk of default by the customer.

This is very common in loan products since higher interest rates are charged to manage risk and overcome losses by potential loans that go unpaid.

Loan Amount

Whilst some lenders offer a maximum loan amount of £15,000, again, this is reserved for the best customers with the strongest credit scores and best looking guarantors. If you have a stable employment, your income is higher than the average and your guarantor has a superb credit rating and owns their own home, you will be more eligible for a £15,000 product.

Similarly, the loan duration will help you maximise the amount you wish to borrow. Lending a huge sum to a customer and asking them to repay over 12 months or 24 months could be quite a financial burden, but spread over 60 months, it is far more feasible for a customer to repay.

Beware though, since the longer the loan amount, the more costly it will be since the daily interest accrues over a longer period of time. Repaying your loan early will help you save money since less daily interest accumulates over time.