Do I Need a Guarantor or Cosigner for a Personal Loan?
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Is a Guarantor the Same as a Cosigner?
What Are Guarantors?
Guarantor vs Co-Borrower
Financial liability. A co-borrower receives a loan and agrees to repay it, whereas guarantors receive no funding from the loan but share financial liability on the debt. Affects loan approval odds. A creditworthy co-borrower can help you get approved for a loan if you have bad credit. Likewise, a guarantor can help you get approved for a loan by promising to pay if the borrowers fall short. Parties to the loan. Each co-borrower shares equal ownership of the loan, whereas a guarantor is an additional party to the loan that accepts financial liability.
What Are Cosigners?
Guarantor vs Cosigner: The Similarities
Guarantor vs Cosigner: The Differences
Personal Guarantor vs Cosigner: Pros and Cons
Qualifications for Guarantors
Creditworthy background Sufficient tangible net worth Satisfactory financial statements Substantial business relationship with the primary borrower
Do Guarantors Get Credit Checked?
Qualifications for Cosigners
Creditworthy background Sufficient annual income Proof of identity Good debt-to-income ratio
Do Cosigners Get Credit Checked?
When Is a Cosigner or a Guarantor a Good Option?
What Happens if a Guarantor or Cosigner Fails to Pay?
A derogatory mark can appear on their credit report for years Their credit scores may plunge They may face legal action for breach of contract
Personal Loans That Allow You to Use a Cosigner or Guarantor
Alternatives to Using a Guarantor or Cosigner
Pledging collateral to secure a personal loan Applying with a co-borrower or co-applicant for a consumer loan Securing asset-based lending for business financing
Frequently Asked Questions
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