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.
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.
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.