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Guarantor Loans

Should I pick a Friend to Help with Guarantor Loans?

If you are looking for a guarantor to help you out with a loan, then you may wonder who is the best person to pick. You may be lucky enough to find that you have a friend who has a good credit rating and that is likely to be willing to help you. But should you pick them?

Making arrangements

When you are discussing them helping you with a payday loan then it is really important to have clear arrangements. You will need to discuss together what might happen if they do have to make a repayment for you. It can be easy to just assume that there will be no need to worry about this and that you will never miss a repayment so you will not need to think about it. However, it is always good to chat to them about the possibility of it happening. Make sure that they are clear on your expectations. It might be that you feel that if you miss a repayment and they pay it then that is how it should be as that is what they agreed to. Alternatively, you might feel that if they do have to make a repayment that you will repay them. You might want to set out how and when you will repay them or you might want to leave it a bit more open so you can just do it when you can afford to.

How will they feel if they have to pay?

It is worth trying to find out how they will feel if they have to make a repayment. Ask them whether they will feel annoyed or sad or whether they will be okay with it. Also ask whether they will financially feel okay having to do that and whether they will expect you to repay them as soon as possible or even if they want a formal arrangement drawn up. It might be best, to help to preserve your relationship if you have an agreement in writing about what will happen if they do have to make a repayment and then you will be able to know exactly where you both stand. If they feel that they will struggle financially if they do have to make repayments then it could be worth thinking about whether it is a good idea to go ahead.

Will it damage your relationship?

It is good to also think about what impact it may have on your behaviour. Helping friends out will usually cement a relationship further but if you do not make some or all of the repayments then it might put some strain on the relationship. If they get short of money and need you to repay them but you cannot, then it could cause big problems between you. If you are close friends then things may work out fine, but it is worth thinking about it and taking together about it first. Make sure that you are both confident that it will work out well for both of you.

Will it affect relationships with others?

It is also worth thinking about whether it might have an impact on your relationships with other people. If they find out about the arrangement they may feel jealous that you have been helped by that friend and it could stop them feeling as close to you. They may also wonder whey you did not ask them for help perhaps and they may feel offended about that. It can be tricky and it is worth thinking carefully about. You may just assume that if you do not mention the arrangement things will not change, but you never know whether it might slip out or if your guarantor will choose to tell someone. As you can see, there could be potential problems with choosing a friend as a guarantor. However, these risks are probably pretty much the same if you chose a family member as well. With family we often have a closer bond and so that could mean that they will be more understanding if you miss a repayment but if you do see your relationship break down it could be a more precious one to lose if it is a family member. It might also impact your relationships with other family members too. This might not just make it difficult for you but it could be awkward at family occasions as well. It is a really big decision and well worth thinking over and discussing with a few people first. Even if you are completely confident that you will be able to make all of the repayments, there is always a risk that you may struggle for some reason, perhaps if unexpected expenses come along, if you are ill and cannot work or have to look after a loved one, so it is wise to be prepared for the unexpected.

Instalment Loans

What are the Advantages of Instalment Loans?

There are many different loan types and if you are picking between them you may feel rather overwhelmed. Some are more well-known than others as well and this may lead to you choosing a loan that you know about even if it is not the best one for you. It is therefore wise to find out about all loan types and then you will be informed so if you do need to use one, you will know which one could be the best for you. An instalment loans is a loan that you may not know much about. The name does give away some clues as to how it works, but it is wise to find out more about it so that you can decide whether it is the right loan for you.

Quick to arrange

An instalment loan can be really fast to arrange compared to other types of loans. This will depend on the lender and you will need to ensure that you complete the application properly and provide all the information that they need. If you do this then you could find that you will get your money within a few hours or at least within a few days. This means that if you need money quickly then this could be a good choice for you as you will not have to wait as long as you often do for other types of loans. They are designed to help in emergencies which is why they can be organised so quickly and sometimes they may even be able to get you the money outside of banking hours as many lenders tend to be available to lend you money at any time even at weekends and evenings.

Instalment repayments

Many of us are used to the idea of payday loans, where money has to all be repaid in one go. This means that we may worry about being able to find al of the money to repay them and to be able to manage after that repayment has been made. An instalment loan is still a short-term loan with many of the advantages of a payday loan but you are able to repay it in instalments. This means that you can spread the repayments and not have repay so much all in one go. This is a great advantage for many people who might otherwise struggle to repay their loan. You will have to find less money for each repayment and therefore you will be spreading the cost.

Credit score irrelevant

Another advantage for many people of this type of loan is that the credit rating they have is not that relevant. Often lenders will take a look at our credit ratings and they will use this as a way to judge whether they are prepared to lend or not. They will assess the risk of the borrower and decide whether they feel that they will be able to trust them to repay their loan and that will determine whether they take them on or not. With an instalment loan this is not considered so if you do have a poor credit rating, then it is highly likely that you will still be considered to take on the loan.

Can borrow smaller amounts of money

With some traditional lenders it is not easy to get a loan where the amount of money you can borrow is just a very small amount. Often a personal loan will start at a thousand pounds and even if you have a more flexible type of loan, such as an overdraft or credit card, you could still have a high credit limit and therefore have a lot of money available for you if you wish to have it. The problem with this is that you may only need a small amount of money. However, if we get given more than we need, we tend to spend it and then find that we have loads to repay and we may not even be able to afford to repay it. It can be much better to go for a small loan and then you will not have to worry about whether you can find the money that you need to repay it. Hopefully by borrowing just a small amount of money, you will find it easy to manage the expected repayments.

So, there are quite a few advantages of instalments loans over other loan types. It is worth taking a close look at them and think about whether this loan will be one that will be suitable for you. It will depend on what your borrowing needs are as well as what your personal financial situation is like. However, you should be able to manage to easily compare it and know whether it will be the right loan for you.

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