Personal loans are a popular financing option for many individuals in India, as they provide quick and easy access to funds without the need for collateral. However, obtaining a personal loan can sometimes be challenging, especially for individuals with a low credit score or limited income. In such cases, having a guarantor can significantly improve the chances of loan approval.
A guarantor is a person who agrees to repay the loan if the borrower is unable to do so. The role of the guarantor is to provide additional security for the lender and assure them that the loan will be repaid. In return, the lender is more likely to approve the loan and offer better terms and conditions.
One person who greatly benefited from having a guarantor is Ashish, a resident of Bangalore. Ashish was in need of funds to expand his small business, but his credit score was low and he did not have enough income to secure a loan on his own. However, with the help of his trusted friend, who acted as his guarantor, Ashish was able to secure a personal loan and expand his business.
The process of obtaining a loan with a guarantor is relatively straightforward. The borrower and the guarantor must both submit their personal and financial information to the lender, including their credit score, income, and employment history. The lender will then assess both individuals to determine the likelihood of loan repayment.
The immediate advantage of having a guarantor is that the loan approval process becomes easier and faster. The lender is more likely to approve the loan as the presence of a guarantor reduces the risk of loan default. Additionally, the loan terms and conditions may also be more favorable, such as a lower interest rate and a longer repayment period.
In the long term, having a guarantor can also help improve the borrower’s credit score. As the loan is repaid on time, the borrower’s credit history will reflect positively, making it easier for them to secure loans in the future. Furthermore, the relationship between the borrower and the guarantor can also be strengthened, as the guarantor is showing their support and trust in the borrower’s ability to repay the loan.
In conclusion, having a guarantor can be a valuable asset when applying for a personal loan in India. It not only increases the chances of loan approval but also offers many benefits, both immediate and long-term. Ashish’s story serves as an example of how a guarantor can make a positive impact on an individual’s financial situation and help them achieve their goals. Reach out to us to know more about your loan options – even tricky cases can be managed if a guarantor is present.