• Payday Loans

    Should I get a Guarantor Loan and a Payday Loan at the same time?

    Sometimes we can be in a situation where one loan does not seem to give us enough money and so we will look at getting several at the same time. You could therefore be in the position where you might be considering getting a payday loan and guarantor loan at the same time, especially if you have a poor credit record. This could perhaps be so that you have enough money available to find what you need or so that you can use one to help you repay the other. Whatever the reason, it is wise to consider whether this is the right decision for you.

    The risks of two loans
    There will always be a risk if you take on two loans at once. There is a risk when we borrow anyway but if we borrow twice then we almost double the risk of us not being able to make a repayment. Obviously if we have one large loan or two small ones our repayment amounts could add up to the same amount but if we miss two repayments this could be a lot worse for us because we will get two lots of extra charges as a result of doing so. This could make the loans much more difficult to handle.

    Precautions can be taken, if we make sure that we have some money put by in case we cannot make repayments or if we are very careful with regards to how much we spend each month so that we are sure that we have enough, then the risk is reduced. We do need to be realistic though when we are looking at our situation and calculating if we can manage in the future. It is easy to think that things will be fine, but it is wise to imagine what might happen in the future and whether we would cope.

    Are these loans a good choice
    These particular two loans are both loans which can be given to those with a poor credit report. It means that they could very well be taken together in certain circumstances. The payday loan will just last for a few weeks as it has to be repaid when you next get pad. This means that you will not be holding two loans for very long, unless you get out another one, once this one is paid off. However, a payday loan can be difficult to repay. This is because you have to repay the full amount all in one go. Although this can be manageable because the payment goes out on the day that you are paid, you then have to manage for the rest of the month with less money. This can be pretty tricky unless you can budget really well and with another loan payment going out for the guarantor loan this could make it even more tricky. However, the positive thing about using a guarantor loan is that if you miss the repayment then your guarantor will make it instead. Although this is not an ideal situation, it does mean that you will not have to miss a repayment and deal with the consequences of that. You guarantor is actually there to provide help in circumstances exactly like this.

    The risk to someone with a poor credit record is that they have this low credit score for a reason. It could be that you have had financial difficulties in the past and so you need to be even more careful now. Risking two loans could be a step too far but you may have learned from problems in the pats and now how to manage things far better now.

    What should you do?
    Deciding on finance and loans and things like this can be really difficult. Not all of us have a brilliant grasp of finance or maths and then trying to decide which loan might the best type, which is the cheapest, which we can afford etc can be really confusing. It can be really good to make sure that you do understand all of this and so if you are struggling, get help. You may find that a free money advice service credit union or even friend or family member ill be able to sit down with you and help you with anything that you need to know. It can be tempting to rush a decision, especially if you are desperate for the money, but you need to make sure that it is a decision that will work in your favour rather than against you in the long run.

    When we need money fast it can be difficult for us to think clearly. We can focus more on solving our immediate problem rather than thinking about the impact that out decision might have on our future. It is so important to try to think things through calmly and slowly, but this can be really hard. Writing things down and talking about them can really help though as you can see things more clearly.

  • Poor Credit Rating

    Do I have to have a Poor Credit Rating to get a Guarantor Loan?

    Guarantor loans can be useful for those with a poor credit rating and are designed for them. However, they do not insist that you have a poor credit rating in order to be accepted for one. It could be a loan which is therefore suitable for those who have a good credit rating as well as those that do not. You do need to think about whether it is the right sort of loan for you and so it is important to understand about how it works and whether it could work for you.

    What is a guarantor loan?
    A guarantor loan is designed for those that do not have a good enough credit record to get a loan of their own. They work by allowing the borrower to nominate a guarantor that will cover any repayments that they cannot make. This allows the risk to the lender to be reduced so they will allow the borrower to borrow thousands of pounds as they will know that if they cannot repay, the guarantor will do it for them. This type of loan is available to anyone that wants it.

    How do they compare with other loans?
    As it is a higher risk loan it might be more expensive than standard loans. However, it is always worth checking as lenders do vary their costs and you never know what you might find when you look. It is always wise to compare between different lenders as there can be a big difference and you could end up making a significant saving.

    With a guarantor loan you will need to find someone that has a good credit rating and is prepared to cover missed payments should you need them to. This is not always an option for all people so you need to think about whether you will know someone like this that will be able to help you. Having a guarantor can give you peace of mind. So, if you think that there is a risk in the future that you may not be able to cover the repayments then this could be helpful. You will have someone else to make the repayments for you and it will mean that you will not default on the loan, it will still be repaid on time and you need not worry about trying to find the money there and then for those repayments. Of course, your guarantor may expect you to repay the money that they have paid out, but they could give you a long time to do so which will help you to sort out your financial problems in the meantime.

    Which is best to get?
    Although cost is a big factor in any lending decision it should not be the only thing you consider. I you have concerns about your ability to manage the loan in the long term, for example then it could be that a guarantor loan could help to protect you against this. In order to help you to decide it is really important to have an idea of what you can afford, with regards to repayments now and think about how that may change as the term of the loan goes on. In order to do this, you will need to take a look at your bank statements and think about your spending. Make a note of how much money you have coming in and how much you pay out on essentials. Also, how much you pay out on non-essentials through contracts and other regular payments. Then you will be able to work out how much you have left which you will be able to spend on your loan repayments. It is really important to also think about any expenses you feel may be coming out in the future and whether you would still be able to afford the repayments at the same time. It might be that you decide that the loan is not a good idea at all because the risk of you not being able to pay is too high. Alternatively, you may feel that there is very little risk but having a guarantor will just help to cover it. You may think though, that there is no risk and you will be fine with a standard type of loan. So even though you may have a good credit record, you will still have the option of a guarantor loan. You will just need to decide whether you think that it is the best type of loan for you. It could very well be more expensive than a standard loan but it could have advantages with regards to giving you peace of mind and so it is worth spending some time considering whether it is a good option for you or not and looking at the alternative options.