Thursday, 24 April 2014

Why do Guarantor Lenders Need to See Documents?

If you or if someone you know has applied for a guarantor loan recently, then you’ll have probably noticed that the lender needed to see some documents before processing the application. Many lenders will ask their applicants for some kind of evidence of who they are and what they earn, but this is not as common for lenders who advance money to those with a poor credit history.

The point of asking for documents is to provide some extra security for the lender, as well as the customer themselves. By being careful about who they lend to, guarantor loan providers are keeping on top of fraud and protecting their customers (both the borrower and the guarantor) against losses associated with this.

What might I be asked for?

When you apply, you’ll be asked to input your details like your name, address, salary and date of birth. These are the basic details that lenders need to ensure that you can A) pay back the loan you want and B) be checked with a credit reference agency. It’s important that the lender knows that the person applying is who they say they are, as otherwise identity fraud could be an issue. For this reason, you will probably be asked to provide a copy of your driving licence or passport so that they can verify that you are who you say you are. The same goes for the guarantor, as it’s paramount that the person agreeing to guarantee a loan knows what they’ve been signed up to.

You may also both be asked for a proof of income and bank statement. This proof of income could be as part of a wage slip or job contract. This is to make sure that you can afford to pay the loan instalments, and that your guarantor is also able to afford it if they have to step in. Most guarantor loan providers lend responsibly, which means that they ensure their customers can afford to pay back their loan without getting into further financial difficulty. The bank statement can help the lender check that you have enough left over after your essential expenses to afford the loan repayments.

How do I give them the documents?

You should never send original copies of your important and personal documents to a lender. Instead, you can make a copy by scanning it in and sending it via email, taking a clear picture and sending the image from your phone or some lenders will also accept faxes. You may be able to post the copies of your documents also, which means there are plenty of ways in which you can provide the necessary evidence.

Different guarantor lenders may require different supporting documents, and each will have varying options as to how you can get them to the lender. If you’re unsure about what you need to provide, asking the lender then give them a ring. This can help to clear up any confusion, and it can also give you a good idea of their customer service.


  1. Due to security reasons many lenders ask for guarantor and evidence but if you feel no one is ready to be your guarantor then you can move yourself to no guarantor loans.

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