The Veracity About Guarantor’s Loan

The Veracity About Guarantor’s Loan

When someone struggles to pay their monthly repayments whether it’s a training course fees, any past repayment of a new car loan or the EMI of a new home or it can be any emergency then guarantor loan might be helpful. It is an unsecured loan which can be a good solution for the emergency needs. The users are mostly the young people who may not be able to repay their loan themselves due to low credit score or they never availed any credit in the past or might be rejected by mainstream lenders. Though, they need someone responsible to secure their loans. In UK, there are some guarantor loan companies that offer short term loans at low interest rates that fit the user’s affordability. These companies provide loan on the username with suitable guarantor. These Everyday Loans can help even if you’ve had bad credit score.

Who can be your guarantor?

The guarantor is a person on whom borrower can trust fully. It can be anyone but can’t be your spouse. The eligibility for a guarantor is that their age should be more than 21 years, who is having a good credit score. They can be a family member, a friend, a colleague, a tenant, and can be a landlord. Besides this, the user and the guarantor both need to be a resident of UK. The guarantor’s name that is suggested by the user should become a helping hand for the user if ever he is in need. These loans can be used for various purposes but cannot use for any illegal activities like gambling, smuggling etc.

Procedure of the application

For getting the loan, the borrower needs to apply online. He has to fill the application form in his own name and register the guarantor’s name. This makes the process simpler and quick. Before the final approval of the proposal, the guarantor’s company checks the user and guarantor details and their eligibility; which does not affect the guarantor’s credit score of their mainstream lenders because the loan is registered in the name of the borrower who may not have any credit history. Once approved, the borrower can start their loan repayment within 30 days. Guarantor Company transfers the whole amount in the guarantor’s bank account and then he can give the money to the user if he is unable to pay any amount.

Settlement of dues

To settle all the dues the borrower asks the company to calculate all the figures, and in case if he had missed any repayment or he is unable to manage his money, the company advices him to take help from the independent organizations. If then also borrower is not in the position of making any payment then his account will be declared default and the guarantor will be asked to make the repayments and the case gets transfer to the debt collection agency or court might get involved and take action. So, the person who is becoming a guarantor needs to know his responsibility and be clear about the fact that he might be at risk if the borrower runs away with the money.

 

What You Need to Know About Payday Loans

What You Need to Know About Payday Loans

If ever you need any emergency loan then you can apply for a payday loan, which is usually in the range of $500 or even less amount. This type of loan is a short-term loan and interest rates are very high if you fail to pay within time.

In this kind of loan, you may have to give an advance post-dated check as some lenders want to play safe. Further interest rates and the penalty for failing to pay back in time can be very high and sometimes it can be of the order of 400% too. Therefore, before taking the loan, you must read the agreement paper thoroughly and carefully.

What is a payday loan?

It is also known as cash advance, post-dated check loans, check-advance loans and can be obtained from many different sources. You can also apply online and the process remains almost the same. All that you need to do is fill up a form to provide your personal and financial details and give your request for the required amount. As a security you may have to give either post-dated check or bank account debit authorization to the lender and also the certain amount of processing fee. The amount required by you is credited to your account within a day.

Your lender will not check your credit rating for providing this type of loan however from 2016, certain new rules are introduced where the lender may try to assess your repaying ability. This kind of loans is for very small amount and the fees are depended upon respective state rules. Being a short-term loan, this type of loan is very costly.

How does it work?

Suppose your car suddenly broke down and you need to repair it urgently and you do not have enough cash with you and your repair bill is say $300. So, while applying for a loan you have to provide a post-dated check of $300 +$40 as a processing fee. The lender will then credit $300 to your bank and after 14 days the lender will deposit your check. In case, your bank balance is not sufficient to honor the check then you have to pay an additional penalty too.

Who can avail such loan?

As per the data available with us about 12 million Americans apply for payday loan every year. Any individual who has check account and has a steady salary income can easily avail this type of loan. Generally, those who do not have a credit card prefer to use such type of loan. People with bad credit or no credit can also get such loan.

What are the benefits?

In case of any kind of emergency situation like car breakdown or paying for hospital bills and similar such situations, people can apply for such loans. Particularly if you do not have a credit card or your bank balance is not sufficient then you can easily get this financial relief. Since, the lender never checks your credit rating, it is an easily accessible loan.

What are the negatives?

It is very important that your loan must be repaid within the due date. If you fail to repay then the penalties are very high which can be as high as 400% too.

What Should You Know Before Taking Payday Loan?

What Should You Know Before Taking Payday Loan?

There are various loans used for the short term, high interest loans and Payday Loans are one of them. Other terms used are cash advance loans, deferred deposit loans and so on. There are various sources offering the payday loan both online and offline. All you need to do is to fill them with some personal and financial information while requesting the loan.

For who?

Anyone who has a steady source of income can use the payday loan option. Borrowers who are not eligible to get the loan from the banks or do not have saving accounts usually prefer payday loans. Some of the common characteristics that the payday loan borrowers have exhibited lately are

  • Lack of a college degree
  • Earn less income on which banks do not sanction a loan
  • Renters
  • Divorced or separated
  • Urgent cash requirement

Benefits of Payday Loans

Credit history does not matter – Almost all the banks require your credit history before offering you the loan. Those who do not have good credit history are not eligible for the loans. Well, credit histories are a difficult thing to maintain because sometimes you might have noticed that even though you have not defaulted on any loan and paying your installments, credit history is not as rosy as you were expecting it to be. Payday loans do not take into consideration the credit history. You can get the loan quickly just by giving a few information.

Higher Amount – Based on your credit history and annual income, the banks would set a limit on loan that you can avail from them. However, payday loan offering companies often consider increasing the amount of the next payday loan if you have paid the first one in time. For instance, if you have applied for $1000 and paid on time, the lender might increase the loan limit to $1500 next time when you want.

Quick and Convenient – Most of the payday loan companies have now moved their business online and therefore you need not to worry about all the paperwork and carry bulky files with you. All you need to do is to fill out the form, give personal and financial details to get the loan processed and money to reach your account. Also, with the payday loan, there is no restriction on the purpose of the loan as with the banks wherein say if you have taken the car loan then it can only be spent on buying a car. With a payday loan, you can settle down any emergency.

Risks

High Interest rate – Be prepared to pay extremely high interest rate on the payday loans. These loans are short term, unsecured loans and therefore the interest component is quite high.

Direct Debit – Before getting the payday loan, you need to sign the agreement for direct debit from the account as and when you get the funds. Make sure that you are aware of this clause beforehand and not just sign the agreement.

Debt Trap – In case you could not pay the loan, you would want to take debt from another lender to pay the first one therefore finding yourself stuck in a debt trap.

 

 

 

 

What Are the Various Criteria for Getting Your Payday Loan Approved

What Are the Various Criteria for Getting Your Payday Loan Approved

Quite often you may need to take short-term loans in order to meet your urgent expenses. For all these years getting such loans were not at all a concern. Nowadays this industry is regulated by the Financial Conduct Authority. Therefore, the approval rates are no longer as high as it used to be for all these years. In spite of that, the rate of approval for any personal loan is still better than any other traditional loan. Lenders have now introduced very high rate of interest in order to minimize their risks.

Following are a few new things introduced before approving your personal loan application.

  • Credit rating checks

By checking your credit rating, it is possible to identify whether you are really a credit worthy person or not. If your credit rating happens to be low then it is entirely under the discretion of the lender whether he will take the risk of approving your loan or not. On the other hand, people with higher credit rating will not face much problem in getting their loans approved.

  • Meet the criteria of lending

There are many loan providers available in the market. Therefore, you too can shop around to find the criteria of their lending so that you may choose the one which is most comfortable to you. There can be different criteria set by different lenders and the lender will assess their risks.

  1. One of the most common criteria is that the applicant must be employed and a resident of USA and have a valid account in any bank.
  2. Lender will also make sure that there is an appreciable difference between your earning and expenditure so that you can repay back the loan.
  3. You are not under any kind of debt already so that with this loan you repaying capacity will further go down.
  4. You must provide complete information about your details in the application form. If you do not fill it completely then the lender may think that either you are trying to conceal something and raise concern.
  5. If you have already taken any other loan then the lender will expect you to clear the same first before approving your personal loan.

Therefore, you need to search out a suitable lender who is ready to offer a personal loan with easy terms before submitting your application. If any of your personal loan application is rejected then also your credit rating may be negatively affected. Therefore, you must shop around to look for the right lender. Following things must be considered while applying for a personal loan.

  1. You must have good reason to borrow money

Every borrower will like to ask the reasons for your borrowing money and therefore you must give any valid reason. If you are asking this loan to meet any emergency expenses then you must be sure that you can repay it back in time. In case you are seeking a loan for a holiday trip or home improvement then chances of getting a loan is poor.

  1. Prefer to apply for the exact amount

If you need a loan for $200 then apply for that much amount. Chances of approval are better if you ask for the smaller amount of loan.

  1. Provide proper documents with your application.

 

Various Types Of Loan Options Available For The Small Business Owners

Various Types Of Loan Options Available For The Small Business Owners

Personal savings of the small business owners can help them to start the business but cannot provide the growth to the venture. There is a need of funding from the outside to sustain the business operations and grow the business. This is where the business loans are important. Nowadays, various sources of loans are available for the small business owners so that they can conveniently meet their needs of funds for the business. You just have to approach the lender and consider the most suitable type of lending option for your business.

Here is a list of some of the popular lending options available for the small business owners. The list is not exhaustive but certainly, you will be getting a fair idea about the loan options which you can get.

Loans from the Bank

When it comes to taking a loan, the first source which comes to your mind is the Bank. Yes, it is the biggest source from where you can get the loan for your business. It is one of the secured sources from where you can get the loan. Interest rates are generally lower than the other lenders and you can maintain your credit score by regularly making the repayments. Banks offer loans for the short term and the long term both hence it is easier for the borrowers to get the funds for the business. If you are having the urgency to get the funds then it is better to look for another option because the loan processing is a time taking process by the banks.

Payday loans to make the urgent payments

If your business is in the need of fund on the emergency basis then payday loans are the best option. This type of loan can be obtained from the financial companies that offer lending facility. Individual payday lending agents are also there who lend any amount for the short term. This type of loan is meant to be repaid on the next payday or paycheck day. Small business owners can easily get this type of loan without any collateral or security. You can meet all types of business needs with the amount of the payday loan. This type of loan can be considered as the working capital loan because it helps in meeting the need of working capital.

Equipment financing option for buying the new facilities

Equipment financing option is ideally for the manufacturing companies. When the businesses need to invest in the new machineries or equipments then the equipment financing option is the best. Machineries and equipments help in enhancing and expanding the business operations but as they are expensive hence the businesses look for the funding solutions. Tenure of the loan is fixed and the interest of the loan is also lower than the other types of loans. In this, the equipments which you are purchasing are kept as a security however you can continue to make use of the same machinery for the business operations.

Apart from these, commercial mortgage loan, cash advance against the credit card, line of credit, bank overdraft and peer to peer lending are some of the business loan options available for the small businesses. They can choose the most suitable type of lending solution to grow their business.