Monday 16 June 2014

Getting a Guarantor Loan to Pay For Your Wedding

The search for a soul mate and life partner can often be a long and arduous journey, and before you stumble across ‘the one’, you will undoubtedly kiss a few frogs, and encounter a number of weird and less than wonderful characters. Upon meeting that special someone, all of this bother is resigned to the past however, and following a period of courting and dating, the time will eventually come to start thinking about the big day.

Weddings: magical but expensive

Now it goes without saying that your wedding day will be one of the most important, if not the most important, days of your life for both you and your partner. Unfortunately such importance comes at a high price, and as any married couple will tell you with a wince, your wedding day will also be one of the most expensive days of your life too, what with the average wedding in the UK costing in excess of £18,000. It is all too easy to get swept up in a whirlwind of excitement, expectation, and pressure, and so much does it matter to make the big day perfect that love will almost always override financial prudence.

Keeping your big day in budget

So financially speaking, the big two tasks for a soon to be married couple is to firstly keep a lid on costs by keeping expectations realistic, to prevent costs from spiralling out of control. Secondly is the small matter of funding it! It is quite feasible to budget carefully for a wedding and plan out a day which is memorable for all the right reasons, and still keep the cost far below the £18,000 average. However there is no escaping the fact that a wedding will cost you somewhere in the thousands, and if you like many others do not have that kind of money to hand, you will no doubt opt to borrow in order to cover the costs of your wedding.

What is a guarantor loan?

If you have a less than perfect credit score and are unable to secure credit from a mainstream lender, why not consider a guarantor loan as a means for paying for your wedding day? Guarantor loans, a traditional form of trust based lending, are an increasingly popular form of acquiring much needed credit. You can borrow anywhere between £1000 and £7,500 over a 1 to 5 year period (depending on the amount borrowed), even if you have less than perfect credit. And with rates of interest fixed at 47.9% APR for a £3000 guarantor loan over 3 years, repayments can be made which are both convenient and affordable.

Guarantor requirements

You will need to find a suitable guarantor to support your application and co-sign your loan agreement once it has been processed. This is in line with the trust based nature of guarantor lending, and it is a promise that the guarantor will only be contacted and asked to make repayments if you can’t. Anybody, aside your husband or bride to be can act as your guarantor, provided they are a homeowner, earn a sufficient income to potentially cover repayment costs, and have a good credit history.

Thursday 5 June 2014

Keeping Your Guarantor In The Loop

Introduction

Looking for credit in this day and age when you don’t have a particularly great credit history will probably have brought you to the door of a guarantor lender. Guarantor loans have grown greatly in popularity since the recession hit and the mainstream lenders became more wary about lending to anyone who couldn't prove they were great at paying credit back. They’re pretty popular now as a result, and although they may seem like a new concept, the fact is that guarantor lending used to be the only way to borrow if you didn't have an asset to borrow against.

The Support of the Guarantor

If you've taken on a guarantor loan in the last couple of years, you’ll know that the guarantor (a close friend or family member) is an integral part of the process. They sign a loan agreement along with you, and therefore agree to pay any loan instalments that you can’t pay. This is rare, as most guarantor lenders will do a full check on anyone they’re lending to, in order to ensure that the loan is affordable to them. To avoid doing these checks would be unfair to both the borrower and the guarantor, as both would end up in trouble through the borrower not being able to pay.

Making Repayments

One of the main things that you need to do as a borrower, aside from making sure you meet each and every repayment in full and on time, is staying in contact with your guarantor. It’s unlikely that your lender will contact your guarantor unless there is a problem. For this reason, it may be handy to keep your guarantor updated when you make payments, and you should certainly give them prior warning if you’re worried about making a payment, as this could trigger contact from the lender.

Keeping Your Guarantor in the Loop

Although it may feel unnecessary to let your guarantor know every time you pay a loan instalment, it could reassure them that you’re handling the loan properly and it will act as a gentle reminder that they've signed up to lend a helping hand should something go wrong. There have been cases where a guarantor has been asked for payment, and they've forgotten all about agreeing to be part of their relative’s/friend’s loan. This can cause a bit of tension and stress, so keeping your guarantor in the loop is an important part of managing the loan properly.

Choosing the Right Guarantor

Your guarantor should be someone that you know and trust, so keeping a close relationship with them throughout the loan term is very important. In the case of most, this will be a no-brainer, but for some their guarantor has come from a short but intense friendship which has dissolved or grown apart since the loan was taken out. Keeping in contact with someone (even if you may not have done so without the loan) can really help if you find you have problems paying one month, or if the lender has a query or question that needs answering by them.