Buddy Loans operate as a professional lender who provides financing options to potential borrowers with no credit or slow credit. Each applicant’s situation is examined individually, and with an understanding that a credit score isn’t the only important point in the borrowing process.
Potential borrowers must designate a guarantor for their loan. The guarantor can be a family member, friend, or co-worker who is willing to also be involved in the loan process. The guarantor promises to make repayment efforts should the primary borrower miss a payment. Both the primary borrower and guarantor will be subject to various credit and affordability checks. This ensures that both parties have the ability to repay the funds based on the repayment schedule.
Loans are available in amounts ranging from £1,000 to £7,500, with repayment terms extending from 12 to 60 months. The current representative APR is 49.9 percent, a rate that is significantly lower than many payday loan options. The payment date can be designated by the primary borrower, with one payment being due each month until the full amount, with accumulated interest, is paid.
When a loan is approved, funds can either be sent to the guarantor, allowing them to pass the funds along to the primary borrower, or can be sent directly to other creditors if the funds are functioning as a way to consolidate other debts.
Early repayment options are available and incur no prepayment penalties. This allows the borrower to make additional payments at any time and lower the total amount of interest paid over the life of the loan.
Borrow £3,250 for 36 months | Interest (fixed at 41.16%): £2464.57. Total amount payable of £5,714.67. Representative 49.9% APR. | 36 repayments of: £158.57
Buddy Loans provides options to those who may not otherwise be able to secure financing, or may only qualify for payday loans, including those with CCJs or other defaults. A guarantor loan offers interest rates significantly lower than payday loan options. This is because the lender assumes less risk by having borrowers work with a guarantor with a stable credit history.
There are no upfront fees to loan applicants. Instead, as long as repayment is made in a timely manner, the only costs associated with the loan are covered within the interest due. Approved applicants can receive funds on the same day depending on the time at which the approval was made. Loaned funds can be used for any purpose including debt consolidation, home improvements, educational fees, or any other purpose.
Repayment schedules can be selected based on the size of the loan. This makes repayment more manageable for many borrowers. By making timely payments, the primary borrower can receive positive marks on their credit report, allowing them to raise their score over time.
After the application is complete, the guarantor is only contacted should the primary borrower fail to meet the repayment qualifications. After a missed payment, Buddy Loans always contacts the primary borrower first in an attempt to make payment arrangements. If arrangements cannot be made, the guarantor will be contacted for a payment in lieu of one from the primary borrower.