Do You Need a Guarantor for a Car Loan?

by Jessica Rodz CashFacts is Your Hope to Quick

The answer is simple, but you need to learn a little about these matters first.

But we will analytically discuss this. Guarantors and car loans are complicated things if you don't know about them in the first place.

People in Ireland are very conscious of financial management. The simple mindset of the nation helped them come up with some rather exciting strategies for personal, educational and business finance operations.

But we can discuss that in some other post.

Now, we can concentrate on the fact of car loans and guarantors. To learn if you need a guarantor for a car loan, then we need to learn two things:

· Your purpose

· What these technical loan terms are, and what they mean

The Argument

The battle starts when we feel that we want to include a guarantor with the car loan.

In an actual sense, the car loan and the guarantor obligation are part of the terms created by the lending industry. It does not always mean that guarantor requirements govern the world of car loans.

Loans and guarantors are closely related. But, as a true fact, we all (even the lenders) know that a loan with a guarantor can get complicated for a variety of reasons. We can use a guarantor if we cannot repay the loan, or we might have non-transparent views about repaying the money to our lenders. Yes, it might relax you and the lender, but it doesn't do the same with the guarantor.

Car loans in Ireland are very flexible, and there are reasons for that. We see various kinds of lenders in the nation. Direct lenders may offer you a car loan without a guarantor or an option of car finance for bad credit in Ireland (more on this later). On the other hand, establishing an asset or collateral will keep the worry of a guarantor at bay.

But we need to know about the loan and the guarantor in detail. So, read on to learn that.

What Can You Get as a Car Loan in Ireland?

Car loans are great financial aids to get your dream car home within a short period. You don't need to think about managing your personal finances. Even if you buy a car for purposes such as business (an online cab service) or rental purposes, then a car loan might help you get the exact vehicle you need for the job.

Let's come to a precise point about car loans in general and a variation (a common one) direct lenders offer you.

A car loan is usually a secured loan option. You use your car itself as an asset to take a loan from a mainstream lender. The car here is the collateral. In some cases, your lender might allow you to choose a different asset for the loan, like your home. In that regard, you can call the loan a mortgage or a home loan for buying your car.

Of course, a secured loan keeps one of your assets as collateral, and for that, you might be offered superb facilities such as low-interest rates, longer repayment periods and many more.

Although these benefits have their plus sides, they might still get stressful for a particular borrower in the long run.

For example, the longer loan term that relaxes you to a certain extent will also make you feel burdened because you will have the thought of this expense running at the back of your head. Then again, you may not make healthy money decisions and more meaningful investments because you do not access all of the money you warn because of the repayment instalments.

Here is where you might look for a common alternative to a car loan, which is personal car loans from direct lenders.

Since direct lenders are professionally dedicated to lending only, they will help you in every possible way with a car loan. The thing is pretty simple, though. Direct lender car loans are free from collateral requirements. You can flexibly use the money too.

You may think that the high-interest rates are one downside of direct lender loans, but you might be wrong. A direct lending practice will offer you a handful of different interest rates and repayment terms that you can choose as per your income.

Added to that, getting a direct lender loan is comparatively easier.

And this is where the guarantor comes in.

The Guarantor Obligation

Who is a guarantor, then?

A guarantor is a person you bring alongside you (the borrower) to take out a loan. You can consider the guarantor as a co-signer of the loan. Although the guarantor has no such requirements for the money, he or she will help assure lenders that you are going to pay the money back to the lender. If, however, you cannot pay the money back to the organization, then the lender might show up at the door of your guarantor for repayment.

A guarantor might also be a group of people or an institution.

Although it feels relaxing to have someone on board, guarantor loans are complicated because they bring extra financial details and verification processes into the picture. It also incorporates the probability of the guarantor's financial troubles in the middle of the term. Such problems may happen with a guarantor individually, and there is no knowing of their recovery. So, the loan repayment might be disrupted.

Choose a Personal Loan as Car Finance to Avoid Guarantors

So, the answer to the question of whether or not you need a guarantor for a car loan is this: You don't need a guarantor if you choose a personal car loan.

It is a good thing to know that personal car finance options from direct lenders do not come with collateral requirements or a guarantor. You have to show the direct lenders a steady income proof (from whatever source it may be).

They will check if the income is suitable to repay the car loan instalment amounts. This will help the lenders determine the loan approval. With no guarantor requirements, direct lenders can skip a lengthy application process and document verification. This will help them disburse the money faster in your account.

Even if you suffer a bad credit score and choose to take out a car loan for bad credit in Ireland, you don't need a guarantor as long as you find a direct lender.

Hopefully, you have found your answer in this post. Just keep in mind that taking out a car loan might also require other information than a guarantor, such as your income statement, ID details etc.

Skipping a guarantor will only keep your car loan term simple and the application fast.

Go ahead and take out the loan without the guarantor.