A guarantor loan can help out those that have a poor credit record. This is because they will ask for the borrower to nominate someone to be a guarantor so that if they cannot make the repayment their guarantor will be asked to pay it. This can seem like a good idea so that someone who would not normally be able to borrow money has a loan available to them. It is worth noting though that they can be rather expensive as the lender is still letting someone with a poor credit record borrow money. Although they have a guarantor with a good credit record backing them up there are still costs to taking the money from a different account and so these are added in.
Deciding on who to ask to be a guarantor for you can be difficult. You will need to pick someone who has a good credit record and that will be willing to support you like this. They will obviously need to sign up to say that they agree to make any loan payments that you miss. This is a big commitment as they will need to be sure that they will have the money available to do this if necessary and that they would be happy to many multiple payments and potentially all of them. It would also need to be someone that you were happy to discuss your finances with.
It could be anyone that you choose and picking a family member or friend would be the most likely options. You would obviously need to explain to them what is happening, why you want the money and what their responsibilities would be.
It is worth talking to them about the possibility that you may not be able to afford to make the repayments. Presumably you will look at them and work out how you will manage to pay them. It might be that you normally have enough money available each month to cover them anyway or that you have some ideas on how you will do this.
If they do have to make repayments they may expect that you will then repay them as soon as possible or they may be happy to take the risk and not expect a repayment. It is really important to make sure that you have an understanding of the expectations that you each have. It could even be worth writing down your agreement so that it cannot cause arguments in the future. If your guarantor has to keep making repayments and then runs out of money they may feel that you should repay them as soon as possible and if you do not have the money available to do this then you could end up falling out over it. If you have an agreement written down then there will be no debate on how repayments are organised and you should have no reason to fall out over it.
Whoever you ask you will need to know really well and have a trust between you. Whether that is a friend or family member there is a risk that you might fall out over the plans and payments and so it is good to think hard about this. With a family member to tend to have a bond beyond that which you would have with a friend. A friend is there for you but a family member is more likely to put you first and to do things out of love and caring as well as friendship. Obviously this various and depends on your relationships with friends and family members.
If you depend on this friend a lot then you do not want to risk falling out with them. It is important that you think about how important their friendship is to you and how you would feel if you lost that. It is not a nice thing to have to do but it is worth considering the risks. It may be that you fall out when you ask them to be a guarantor. They may not want to do it and if they refuse this might offend you and so you might feel that you do not want to be their friend anymore. They may accept in order to preserve the friendship but it could affect your relationship with them as they may wish that they had not. If you start to miss repayments then this could make things even worse. They will then have to start paying out and they may not have expected to have to do this. They may need the money themselves and want you to repay it really quickly and you may not be able to afford to. This can lead to all sorts of problems and even if you have talked about it beforehand and planned what might happen it can still lead to bad feelings.Read More
If your car is in need of a repair then you could be worried about where you are going to get the money to pay for it. Borrowing might be your only option and if you have a poor credit record or need the money quickly, it could be that a payday loan is the best option. However, it is worth thinking through your decision.
It is worth thinking about whether it is really necessary to have the repair or whether it is necessary right now. It very much depends on what needs doing as to whether it is safe to drive the car without having it done and whether not getting the repair is causing damage elsewhere on the vehicle. If it is just cosmetic then it could be worth waiting to save up for the repair rather than having it done and paying for a loan to get it done. The loan costs are likely to be very high and not worth it for an unnecessary repair. If it is urgent it is worth thinking about whether you can manage without a car for a while as you save up for the repair. However, if you need to have it done for safety reasons or because it is causing more damage and you do not have the money, then a loan will be the only option you have if you want to continue driving the vehicle.
Before having any repair it is worth thinking about the cost and whether it is worth investing the money in the car. You could feel that because the car is old or has had a lot of repairs it could be better to get another car and scrap this one. This is obviously a more expensive option in most cases but might be better than to keep paying for repairs on a vehicle that is past its best.
If you do decide to get it repaired then you need to take a look at all of your options with regards to garages. There may be different places that you can go and they will charge different amounts of money and so you need to see if you can find the cheapest so that you do not have to borrow more money than necessary.
You should also compare your loan options. There will be different ways that you can pay, but what loans are available to you will depend on your credit record. If you have a poor credit record then it may be that a payday loan is the only option. Also, if you need the money quickly and do not have time to arrange a different type of loan it could be the most suitable.
However, if you do have a good credit record or can wait a small amount of time for the loan, then you might be better using an alternative. You might want to consider an overdraft, credit card or small personal loan instead. These are usually cheaper as long as you repay them fairly quickly. You might want to do some calculations in order to compare them and see how the costs compare. It could be worth waiting for one of these to be approved compared with getting a payday loan right away.
If you do go for a payday loan make sure that you are prepared for the repayment. It is normally just one lump sum repayment which is paid on your pay day. This can make it more affordable but you still need to be confident that you can afford all of your bills as well as the loan repayment.
Make sure that you compare the costs of the different loans to see which will be the cheapest for you before you sign up. This is sensible whatever type of loan you are planning on using. With payday loans there are lots of companies that offer them and you should be able to compare them fairly easily as they tend to have a calculator on their website. If you are unsure then get in touch with the lenders and ask them.
So, whether you should use a payday loan for a car repair is not an easy question to answer. With all types of borrowing you need to be careful and only take on what you can afford and what looks to be a competitive price. It can be best to wait for a conventional loan which could be cheaper or for longer so that you have the time to save up for the repair. Obviously, this will depend on how urgently you need the repair to be done and whether you can manage to continue to use the car without it being done or whether you can manage without the car entirely. A payday loan should only be taken if you are confident that you will be able to manage the repayment which is usually a lump sum and therefore can be tricky to afford.Read More