Will having a guarantor help me to get approved for a bad credit car loan?

If you’re having trouble getting approved for a car loan, you might be wondering if having a guarantor could help. Having a guarantor means that a lender may find your application less risky, as there is someone who can repay the loan as a backup in case you cannot.

However, asking someone to be a guarantor for you is a big decision and an even bigger responsibility for whoever agrees to step into this role for you. Once you have found someone to agree though, you may find that you are able to get your loan approved due to the extra security that a guarantor can provide for your loan.

Read on below to find out more about having a guarantor for a bad credit car loan.

What is a guarantor?

A guarantor is generally a family member or a friend who has agreed to make your car loan repayments if you default on your loan. A guarantor’s role in a car loan is to be legally responsible for the full value of the loan, plus the associated costs if you find that you are unable to pay them yourself.

Usually, it is the guarantor’s responsibility to make sure the loan, interest, fees and charges are repaid on time. Otherwise, the guarantor may be asked to repay the remaining amount. If your guarantor cannot afford to make the repayments, security, such as the car, might be seized and sold by creditors to cover the lender’s losses.

Having a guarantor for a car loan can be useful for those who might struggle to get a car loan approved on their own. Having a guarantor means that there is less risk for the lender, as there is a backup if the borrower cannot make their repayments.

Will having a guarantor help me to get approved for a bad credit car loan?

In most cases, anyone can apply to be a guarantor for somebody’s loan. However, it is usually taken on by a family member or a close friend, due to the fact that it is a big responsibility to take on someone else’s debt in the event that they cannot repay it.

Your lender may ask both you and your guarantor to provide details such as credit scores, bank statements, proof of income and any current debts. Generally, a guarantor must be able to prove they have a good credit rating and are currently employed with a stable income, as this will help a lender to see them as a reliable borrower.

Do I need a guarantor for a bad credit car loan?

Generally speaking, you may not need a guarantor for a bad credit car loan if you can prove to your lender that you can make your repayments yourself and that you are not a risk to lend to. If you can supply all of the documents that your lender requires and you can prove that you have a stable and regular income, your lender may not necessarily require a guarantor, even if you have a bad credit score.

It could be best to check with your lender as you apply to see if they will require you to find a guarantor for your bad credit car loan.

Where does Tiger Finance come in?

To us, you are more than your credit rating. We have helped countless Australians with both good and bad credit ratings to be funded for their dream car. The lending criteria from other lenders can be unfairly strict when you have bad credit, and it can hold you back.

With Tiger Finance, we can help to get you a loan in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved.

How we can help

Tiger Finance is here to help you to get your dream car regardless of your credit score. We can make the process simple and pain-free. If you’re ready to drive away in your new car, call us today for your free initial consultation with one of our loan specialists.