If you’ve been turned down for loans in the past, a guarantor loan like TrustTwo could allow you to borrow money and build your credit rating while you're at it.
TrustTwo was a direct lender that prided itself on being there for people other lenders turned down. It did this by offering guarantor loans and focusing more on whether or not the loan would be affordable for you rather than on your credit score.
Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.
Late repayments can cause you serious money problems. See our debt help guides.
What is a guarantor loan?
A guarantor loan is a type of unsecured loan that requires a co-signatory. This person might be a friend or relative. They agree to pay back the loan should you struggle to meet the loan repayments. This type of loan generally comes with a higher interest rate, as it represents a greater risk to a lender, but it is available to people who can’t get finance through the regular lending streams.
Key features of TrustTwo personal loans at a glance
TrustTwo loans were “unsecured”, meaning they were given based on your (or your guarantor’s) creditworthiness and were not secured by property or assets. Here are some of the other key features that TrustTwo loans had:
Borrow from £500 to £10,000.
Loan terms from 12 to 60 months.
Fixed rate of interest, so monthly repayments remain the same throughout the loan term.
Your guarantor can be a homeowner, a tenant or live with their parents.
Access to funds within 3 days.
No set-up fees.
The loan will be in your name, so providing you stick to the repayments, it will help improve your credit record.
Repay your loan early at any time.
APR and Representative APR explained
The Annual Percentage Rate (APR) provides an annual summary of the cost of a specific loan, taking into account both interest and any mandatory charges (like an application fee) throughout a loan. If the lender doesn’t charge any fees, the advertised APR is the same as its interest rate.
All lenders must calculate the APR of their products in the same way, so it should be a handy tool for comparison, but unfortunately, there’s a catch.
Most lenders tailor interest rates to the applicant – in other words, the riskier they think it would be to lend to you, the higher the interest rate they’ll offer you. The representative APR is the APR that a lender realistically expects 51% of its customers to pay. If your application for a loan is successful, the lender will make a specific loan offer to you, detailing the actual APR you’ll receive.
Eligibility
TrustTwo loans, being guarantor loans, had relatively lenient eligibility criteria for the borrower and fairly standard criteria for the guarantor.
Borrower criteria
You must be over 18 years old.
You must be confident you can meet the loan repayments.
You must have someone who is prepared to be your guarantor.
You must have an income.
Guarantor criteria
Your guarantor cannot be your spouse but can be a close family member or friend.
They must be aged between 21 and 75.
They must have a good credit history.
They must have separate finances to you.
They can be a homeowner (with or without a mortgage), a tenant or living with their parents.
They must agree and be able to make loan repayments if you don’t.
TrustTwo considered almost anyone for a loan, but the credit history of the guarantor was important. It helped if they were a homeowner and had a good annual income. You were also more likely to be accepted if the guarantor had no recent bankruptcies or convictions.
How can I apply?
You can no longer apply for a TrustTwo guarantor loan. However, in general, guarantor loans can take a little longer to organise than a traditional loan, because there are a few extra hoops to jump through.
No, the loan is in your name, and you must be able to make the repayments on your own.
No. Your guarantor can be a tenant or even live with their parents. However, they will need a good credit score, and generally, homeowners have better credit scores.
You’re free to use the loan for almost anything you like, provided it’s legal! The only no-nos are gambling and business purposes.
By direct debit. TrustTwo sets this up for you. You’re also free to overpay or clear your loan early at any point.
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Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio
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TrustTwo is a specialist lender providing guarantor loans for those with a bad credit. Compare similar companies here.
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