Are Guarantor Loans Just for Young People?

A guarantor loan is a loan where the borrower elects a guarantor to make any repayments that they miss. It is often thought that this will be done by a young person with a poor credit record who will use their parent as a guarantor, there for the borrower is young. However, there are no age restrictions on these types of loan, but it is good to have a good understanding of how they work when you decide whether you want to use this sort of loan or not.

How a guarantor loan works

A guarantor loan is specifically designed for those that have a poor credit record and therefore find it difficult to get a loan. Although payday loans and other smaller loans are available, it is possible that a person may want to borrow a larger sum of money. These guarantor loans will allow them to do this, especially if they need money now. However, they have to find someone with a good credit record that will be willing to make any payments that they cannot afford to make. Often it would be thought that this could perhaps be a young person borrowing who has not had time to build up a good credit record or who has managed to build up debts that they could not pay off and wants to borrow some more money for something significant. However, there is no age limit on the loan and as long as the borrower can find a guarantor then they can apply for the loan.

How to choose your guarantor

It can be quite tricky choosing a guarantor. It must be someone with a good credit record and so this might rule out some of the people that you know. It is worth noting that it will need to be someone with an income and usually who is not self-employed as without a regular and permanent income your credit score will not be so high. As they will have to be prepared to cover repayments for you if you miss any, then it will need to be someone that you know well and that you trust and also that trusts you. You will need to think about your relationship with the person and whether it will stand up to something like this. Often, you will not be able to ask friends for something like this as you will not know them well enough or feel that they will feel like they can help you. They may even be in a similar situation to you with regards to your credit rating. Family tend to be easier to rely on in this situation as they will be more prepared to help you. You may also look to members of the family that are good with their money and therefore more likely to have a good credit record and that could mean older members who have had more time to learn how to handle their money well, who are better paid or who feel like they have some responsibility towards you and are more likely to be willing to help you. However, if they are retired then they may not have enough income to have a good credit score and if they have a dependent family they may not have money available to help you out.

Is it best for young people?

Although it might seem like a guarantor loan is best for young people, there is no age limit on it. It could be that older adults might be struggling, perhaps due to illness or redundancy or because they are struggle to provide for their growing family. It might even be the case that retired people need to use the loan because their pension is not enough to cover some expenses that they have. It is best not to think of a specific loan only being suitable for a certain age group. This is because if you are looking for a loan, you do not want to eliminate a certain type just because you feel your age is not right for it. It could be the perfect loan for you and you want to include it in the list of potential loans when you are doing your research so that you make sure that you find the right one for you.

So, try not to discriminate against a certain loan until you know lots about it. You could find that you will otherwise be assuming that a loan that is suitable for you will not be and it could mean that you will end up with something that is just not right. It would be a shame to do this and therefore make sure that you fully research everything first so that you are sure of what you are getting in to and then you will know which will be the best for you.

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Top Tips for Using Short Term Loans to Your Advantage

When we think of loans we will often just focus on the cost, but they can really advantage us. We should not think about the negative side of the loan with regards to the fees and charges but focus on the positives and the services that lenders can provide for us. Even if you are using a short-term loan you can find that there are many advantages.

Use them wisely

The first thing to be sure of, which applies to all loans, is to make sure that you use them wisely. You need to think about the fact that you will be paying for this loan and so you want to make sure that you are using it for something that is worth this extra money. For example, if you calculate the cost of the loan as £25 then think about whether you would still buy the item that you are using it to pay for if it was £25 dearer. It might be the case that you would be more than happy to pay the extra and possibly more as well but you may feel that you do not think it is worth that extra and that you should not bother with the loan. Also think about whether you can wait for the item that you are using the loan for. Perhaps it might be better to save up for it or at least wait until you are next paid before you use the loan and that will allow you to pay less for the item. Short-term loans are really designed for emergencies, although you do not have to use them for this. Think about whether you feel what you are using it for really is an emergency or whether it can wait.

Choose the best value for money

It is good to compare different types of loans to see which will provide you with the best value for money. It is usual for people to just compare loans on interest rate and often you can find a comparison website that will do that for you. However, it is wise to think about anything else that might be important to you as well. Consider whether there are any fees on top of the interest as well as the costs you will have to pay if you miss a repayment. Consider the repayment schedule and whether you think that you will be able to afford to make the repayments like that. Consider the lender and their reputation, customer service and how easy they are to contact as well. All of these items should be things that you consider as well as the cost. If the cheapest lender does not offer a repayment schedule that you can afford or has a bad reputation then you need to think about whether you think it will be better to use one that is a bit dearer but can provide a better service for you. Beware of review sites as well because whether we like a lender is a very personal thing and you do not always know why the site has rated a certain lender above another. They may also get commission on leads from their site so may be more likely to do a good review for a lender where they can get more commission. It is therefore much better to do your own research.

Repay on time

One massive way to take advantage of short-term loans is to make sure that you repay them on time. They will make much more money out of you if you miss a repayment or repay late because they can charge you extra money. Therefore, if you make sure that you repay on time, you can avoid this. It is therefore wise to make sure that you only take on a short-term loan if you are really confident that you will be able to repay it on time. There are different loans which have different repayment schedules and therefore you should be able to find one that suits you. Make sure that you check your finances to calculate how much you will be able to afford and you will be able to choose the best loan to suit your needs.

So, it is a good idea to make sure that you really need a loan in the first place. If you decide that you do then make sure you choose the right type of loan and the right lender so that you get the best possible arrangement for you. You also need to make sure that you repay on time and that will ensure that you are not charged more money than necessary for the loan that you have chosen. It takes time to do this so make sure that you allocate yourself some time and then you will be able to ensure that you really do use the loan to your advantage.

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