Guarantor loans were created by lending companies to provide anyone who would struggle to successfully apply for a standard unsecured loan with the opportunity to secure a new line of credit.

When applying for an unsecured bad credit loan, the borrower will generally be charged with a very high interest rate because they will be viewed as posing a risk to the lender due to their poor credit history. Guarantor loans, however, offer an alternative way of borrowing that does not place reliance on having a perfect credit history. By offering re-assure to the lender that someone you know can cover any repayments you may miss, the perceived risk to the lender is reduced and this in turn will reduce the amount of interest charged for borrowing.

Generally guarantor loans are available with an associated APR of approximately 50%, which is considerably less than the 4000% charged by many payday loan companies for an unsecured loan.

How Guarantor Loans Work

The loan guarantor basically acts as a buffer against payment default. By undertaking a binding contract to cover any missed repayments and taking on responsibility for the loan, the risk to the lender is significantly reduced.

However, because the loan is in the borrower’s name, the guarantor does not need to do anything else. It’s important though, that the guarantor fully understands the importance of their commitment and responsibility. It is crucial that they can afford to make the repayments should the need arise and for this reason the guarantor – as opposed to the borrower – will be subject to credit checks, in order for the lender to approve the loan.

Benefits of Guarantor Loans

Guarantor loans offer borrowers with a less than perfect credit rating the chance to access credit at vastly reduced interest rates when compared to virtually all other forms of bad credit loan. This ensures that guarantor loans offer the best option for anyone with bad credit. It also provides the opportunity for the borrower to repair their credit record, because all repayments are made under the name of the person actually taking out the loan.

But what other benefits do guarantor loans offer? At a time when many people are struggling to meet the bills, combined with an insecure employment market, taking out a loan is often a worry in itself. This worry can be significantly reduced by applying for a guarantor loan, although it is important to fully understand the risks of benefits attached to guarantor loans, and how they work, before committing yourself.

Risks of Guarantor Loans

The guarantor will nearly always be someone who knows the borrower well and trusts them to make the repayments as scheduled. If however the borrower finds themselves in trouble and unable to make the payments, the guarantor will be expected to step in. If this situation arises, it’s always a good idea to make an arrangement to repay your guarantor if they have to step in and help.

Who can be a Guarantor?

Because the guarantor may have to step in and assume responsibility for the loan, it’s important they are financially secure themselves. For this reason, a guarantor will generally be expected to be a home owner aged over 23, with a excellent credit record and receiving a regular income.

How much can you Borrow?

An unsecured guarantor loan allows you to borrow up to £7,500, normally over 60 months. It is always prudent to ensure that there are no set up or hidden fees attached before signing up, to avoid extra costs.

Amanda Gillam : I work as a blog writer for a finance company called Solution Loans which specialises in Guarantor Loans. I hold a degree in financial management and enjoy writing about a variety of topics including finance, transport, travel, sport and business.

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Introduction to Debt

It is almost inevitable that we’ll run into debt at some point in our life; whether that’s on credit cards, loans, overdrafts or any other item of credit. Debt shouldn’t be feared; in fact without it we’d never be able to establish a good credit score.

The only time debt can become a problem is if you let it run out of control. For example, having large outstanding balances on credit or store cards while attempting to repay car loans and arranged overdrafts is likely to cause financial problems. This is why it is important that you take action as soon as you feel your debt is becoming unmanageable.

Face the facts

Often the core reason people get into heavy debt is because they’ve buried their head in the sand and continued to spend in the same way they always have. Your first step to financial freedom is facing the facts and subsequently working on a recovery plan. Naturally, you will have to make some cutbacks, meaning for the foreseeable future luxuries will be out of the question.

Draw up a spending plan

Drawing up a budget that breaks down all sources of income and outgoings will help you to understand your current financial situation. It will also highlight areas where you’ve been overspending thus giving you a chance to make cutbacks and increase your level of disposable income.

Set Financial Goals

Having drawn up a budget you can then start to set some financial goals. We always recommend setting a list two different types of goals; short-term and long-term. Your short term goals should include things like clearing all loan arrears, clearing your overdraft or paying off the outstand balance on a credit or store card. Naturally your long term goal should be getting debt free; however it’s important that you set a date of when you want to be debt free by. By being both ambitious and realistic with your timescales you will ensure you’re never short of motivation.

Frequently reassess your situation

Throughout your journey to financial freedom it is likely that your finances will be consistently changing, this is why it is important that you continually refresh your budget. For example, if you pay off a credit card balance this is likely to leave you with some extra cash each month that you can churn back into something else e.g. overdrafts or loan repayments.

Ensuring that your budget is always fresh should also give you some idea of your progress. Initially it may be tough, but sticking to your budget is the best way to financial freedom. In order to motivate yourself you could offer incentives or rewards in conjunction with your financial goals. For example; treat yourself to a meal out when you pay off your first item of credit.

Seek Help

If at any point you feel like you’re struggling to stay on top of your finances then seek advice. There are loads of ways in which you can do so; the internet is a great way of doing so if you’re not confident with speaking face to face regarding your problems. Many debt charities will also have trained agents at the end of the phone who help people like you on a daily basis. Try to avoid public forums, these are generally full of people who simply offer their opinion rather than trained advice.

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Buying a house is an incredibly exciting step in your life, however it can also become a financial nightmare if you rush into it before you are truly ready. The commitment of a mortgage and the costs associated with bills and general maintenance can be far greater than you expect, leaving your budget severely compromised. Here are some important things to consider when asking yourself whether or not you are financially ready to buy your first home.

Assess Your Budget

One of the most important steps in working out whether you can afford to move forward and buy a home is to assess your budget. Spend some time getting to know your financial capabilities, and understand how much you have on hand to cover possible mortgage repayments. It’s a good time to do a review and work on your budget to make it as clear and comprehensive as possible. The better your budget is, the greater chance you have of being in a strong financial position to buy a home.

Future Stability

It pays to always think towards the future, and try and envisage some of the tricky situations that life could throw your way. Consider what would happen in the event of reduced income, being unable to work, or losing your current employment. If you have a strong financial base and could cover your repayments through your existing savings, chances are you are in a good position to buy. If you would struggle to meet the repayments under these circumstances, then perhaps you should work on creating a stronger savings base to assist when times get tough.

Know Your Limits

When applying for a home loan, it is essential that you stick to your limits. Know what you would be comfortable with in regards to mortgage repayments, and resist the temptation to buy a house that will be beyond your means. If you find that you are consistently being knocked back by the banks, you may be trying to borrow too much, or you may not be in a strong enough financial position to buy a house just yet.

Consult an Expert

It can be hard to honestly appraise your financial situation and decide on whether you are ready to buy, so why not take it to the professionals. By consulting the team at Fox Symes, you will be able to access expert advice on your financial position, and whether or not you will be able to adequately cope with the financial strain of buying your own home. The added advantage is that on top of being qualified debt solutions specialists, you will also have the opportunity to access a Fox Symes home loan which has been individually tailored to best suit your needs.

It’s easy to get in above your head when buying a house, especially if you take the plunge and buy too soon. By keeping these important points in mind, you can ensure that you get an honest assessment on whether or not you are truly financially ready to buy a house.

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Cars mean something to all of us. If you’ve been lucky enough to get your hands on a luxury vehicle or sports car, the feeling you may use to describe them would most likely be along the lines of pure joy and euphoria. However if you’re driving a clunker from 80’s you probably swear at your car more than the participants of a typical episode of the Jerry Springer Show.

If you’re in the market for a new car, some of your time has probably been spent pondering over whether to buy or lease. Here’s some more information on buying versus leasing, including the advantages and disadvantages of each:

Buying:

Some may argue that the best option may be to buy new and look after the vehicle well until the last payment is made. At this point instead of selling, you keep the vehicle. The idea is that because the car is well looked after, maintenance costs are reduced throughout and after the vehicle is paid off.

The benefits of buying:

• Even though the car is registered in your name, the bank technically owns the car until you pay the last instalment. However at the end of the period you will have an extra asset under your belt.
• When you buy a car, insurance companies view you as lower risk and the monthly payments you’ll need to make will be lower.

Disadvantages of buying:

• Monthly payments are typically higher when buying the vehicle.
• When buying, the dealership will require a deposit or down-payment, which means that the initial cost when buying is considerably higher.
• If you buy, payments are amortized over a 48 – 72 month period and take the entire cost of the vehicle into account.
• Cars generally lose some of their value in the first couple of years to depreciation. However if the payment plan is taken over too long of a term then there’s a chance that you could end up owing more than the car is worth.

As with other loans payments are divided between capital and interest.

In the first couple of years paying your car back, more of the payment goes toward interest than capital.

*Leasing:

With this option you’re essentially renting the car for a fixed period (usually 36 – 48 months).

The amount you lease a vehicle for is determined by the difference between the purchase price and residual value, which is the pre-determined value of the vehicle at the end of the lease.

Benefits of leasing:

• When leasing, the initial costs that you incur when acquiring and maintaining the car are less.
• Monthly payments are much lower and leases require less of a deposit than purchased vehicles.
• When you buy a car you pay for depreciation based on entire value of the vehicle. However when leasing you only pay for the use and depreciation of the car for a set period.

Disadvantages of leasing:

• Most leases also come with mileage restrictions which means you’re only allowed to do per year (usually around 12 000 miles a year). If you exceed this, you pay more at the end of the lease.
• Insurance providers may also charge higher premiums for leased vehicles.

Pre-owned vehicles are another option worth looking into. For example vehicles that have been returned after expired leases can be bought for substantially less than their brand new counterparts.

This article was written by Daniel Stevens who is a fan of the great outdoors and when he’s not writing up a storm 😉 – that’s where you’ll find him.

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The 401k loan is being availed by a lot of moderate income people. Basically, availing this loan is the loan from your own account. The retirement balance provides the grants of the 401k loan. Making a home is dream of everyone. And people seek money when they need to build up their own home. Nevertheless, a lot of mortgage solutions are available in the market.

But, those might not be affordable to many for the high rate and non comfortable terms. Nevertheless, the 401k solutions can be very comfortable in these matters. So, you can easily get to pick the 401k loan as mortgage solution. Here you get to know the detailed discussion in this regard.

401k loan as mortgage solution:

You can easily get the 401k loan as mortgage solution. Here you get the issues which can convince you to get the loan as mortgage solution. Here you get those issues which are too much convincing to avail a 401k mortgage solution. This new service offering $2500 Bad Credit Personal Loans for Borrower in Financial Trouble -PRNewswire-iReach for getting approved for mortgage loan.

Low rate:

The best part of the 401k financial solution is that it offers the borrowers with very low rate and that is the reason it is easily affordable in all respect. The 401k financial solution offers the borrowers with an interest rate of only 1% and this is certainly a very low rate solution. If the comparison goes with the other home loans available in the market, those will tend to get higher.

So, you can grant this financial solution as a favorable one when you need a mortgage loan. Having such a low rate loan might not be a possible idea with the traditional loans. So, you can easily depend on this solution.

Long term:

Another good part of the 401k loan is that it offers the borrowers with long term solution. The best part of the long term loans is that it offers the borrowers with easy loan rate. And from that point of view, you can easily manage to afford the debt. Though long term debts are a bit troubling, it is manageable if you can get to be a bit smart. So, you can certainly pick the long term financial solution with the 401k grant program and use it as a mortgage solution.

Easy repayment system:

The repayment system of the 401k loan is very easy. In fact, you can not avail a shorter amount of loan from this source. So, for a mortgage solution, you can grant this program as a perfect one. Also, you will not need to take a lot of tension about the debt repayment.

Nor, you will need to take the hassle of distributing the money. The debt repayment installments will automatically get deducted from the account of your salary and thus you can easily get the payment done. You will get a salary paycheck with the deducted amount.

So, in all respect, you can treat the 401k loan as a better mortgage solution and certainly you will find it as most favorable that the traditional mortgage solutions. Click here for more information.

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