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Tesco is now selling Christmas chocs in AUGUST! 🎄☃ We're all for spreading the cost by stocking up early, but at £5 these aren't even going cheap (and what are the chances of them remaining uneaten till December??!) Probably best avoided for now... 😂

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Criteria for choosing the right guarantor

Being a type of an unsecured loan, guarantor loans unlike logbook loans www.justlogbookloan.uk, will not require you to risk your car or house by putting it up as security. While virtually anyone can act as your guarantor, you need to be very critical when settling for one. This is because the guarantor you choose can either increase or destroy your chances of getting the loan. And even though it seems like a simple process, it can be one of the toughest steps when applying for a guarantor loan. You, therefore, need to be very careful when choosing one. Here are some few tips you can use to help you out.

Lean on trust

You really need someone that you can trust, and they also need to trust you right back to risk their financial situation for your sake. This is very important since you might face some hard times in meeting your payments. In this case, your guarantor will be required to cough out the payments. All these are possible outcomes that should be expected and can have dire consequences. You do not want to ruin your family or professional relations. That’s why you need someone who can trust you to keep your deal and you can trust them to be there for you. Ensure, the person you choose is fully aware of the responsibilities involved and that in case you default payments they can help you out without hurting their own finances.

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Good credit

It is imperative to choose a guarantor with more than good credit scores. Remember, you are using a guarantor because you have a poor credit history and their aim is to help you obtain the finances you are looking for. That’s why the guarantor needs to have a blameless credit history so as to convince the lender they can offer support if needed to. Besides, a guarantor with good credit and stable source of income can be able to pay they loan if need be. Avoid going for a guarantor with debts and CCJs. You’ll get a lesser amount than you may need. Alternatively, if the person you’ve settled does not have a positive credit score, they should be a homeowner.

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Go for a close relative or colleague

Most of us typically feel embarrassed to expose our finances to people we don’t know too well. That is why you need to choose a guarantor who is close to you and with whom you will be comfortable to freely express your financial situation without being worried. You don’t want to find everyone in the office talking about how much debt you’re in the next day you go to work. In order to avoid ugly surprises, your guarantor should also be able to open up about their finances to you before you make up your mind. Sometimes appearances lie and the person you think is financially stable could be in a situation that’s a lot worse than the one you are in. Remember, you basically need someone who is close to you to survive any rocky moments in your relationship.

Look for mutual respect

Ensure you have mutual respect with your guarantor as it is very vital for the survival of your loan partnership. You need to respect your guarantor and keep your end of the bargain to avoid putting their finances under strain. Do not default payments if you had not talked about the likelihood of it with your guarantor. Likewise, the guarantor also needs to respect you and keep the loan agreement to the end. He/she should be solvent to pay your loan in case you cannot go on with the payments.

When handling guarantor relationships you ought to proceed with caution. Ensure you are confident that you can repay the loan without difficulties. Discuss with your guarantor the risks involved and confirm that they are comfortable with the arrangements. After all, you do not want to ruin your professional relations because of missed payments.

Key tips to consider when planning your retirement

While most people remember to plan and diarise other major events in their lives, only a few attempt to put their retirement in order. Unfortunately, financial planning is crucial if you want to enjoy your stay at home despite having no source of income. Failure to plan could lead to serious money complications. Be on the safe side and start early so as to have ample time to put your account in order. After all, you do not want to go to an early grave because of financial stress. Therefore, here are some top tips to consider when making decisions as you transit from employment to retirement.

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Clear debts

Apart from the usual budgeting talk, you need to pay off your debts as soon as possible, preferably before you retire. Clearing your debts using your savings when you don’t have any income source is one of the worst mistakes you’ll ever make.

Start by adding up the amount of money you owe in debts, then calculate the debt with the highest rates and pay them off first. Do this on the next set of debts till you pay off all your debts. Remember, taking large sums of money from your tax-free retirement cash, especially if you belong to a defined benefit group such as salary-related pension scheme, can be very expensive. Therefore, ensure you do not owe anyone money if you want to enjoy your pension in peace.

Avoid taking risks with your pension pot

Do not take risks with the pension money you’ve been saving as this will be the main financial support once you retire. Typically, some or all of your savings could be invested in funds. As you draw near to your retirement day, it is wise to gradually move this money to a lower risk investment so as to spread and reduce the risks involved. Good news is, some pension firms do this automatically and if yours is one of them. However, a majority do not, therefore, you need to do some thorough follow-up if you don’t want to lose your money through some high-risk investment.

On the other hand, avoiding risk altogether is also dangerous since most high-risk investments have a greater probability of greater returns. Try to consider all the investment options and find a balance to manage the risk.

Be disciplined

The key to a comfortable retirement is discipline. You need to have the discipline to start saving early enough while still working. Remember, saving will create funds for investments when you retire, eventually translating to a retirement loaded with vacations. Avoid spending most of your current income on an affluent lifestyle. Rather, be disciplined enough to ensure your lifestyle lags behind your income as you create a foundation for the future. Additionally, use a financial planner to help you stay focused and come up with a plan that will best work for you. After all, a planner has the expertise and time to oversee all your investments and evaluate them to ensure they bring back high returns.

In conclusion, think about your retirement before you reach there. It is better to be planned than to lack money to pay bills. Remember, a comfortable retirement will eventually translate to good health and graceful aging. Therefore, think hard and plan smart about it.

What you need to know about guarantor loans

To some people, getting a loan can prove to be an uphill task, especially if their credit history is not pleasant. There’s an estimated 7 million citizens in the UK who cannot be loaned by a bank because of their credit history. That’s why a guarantor loan is specifically designed to offer a solution to such people. However, even though most common users of guarantor loans are people who have been turned down by mainstream lenders due to their not so pleasant credit record, people with good credit can still access them. Here is an easy to understand overview that will tell you all you need to know about guarantor loans.

What they are

Being a type of an unsecured loan, guarantor loans, unlike logbook loans, will not require you to risk your car or house by putting it up as security. All you will need is a co-signer; someone who vouches for you. This means that your co-signer offers to repay your loan should you default on the agreed payments.

How they work

Guarantor loan lenders operate on a very simple principle behind them; if the guarantor trusts you, so would the lenders. This is because by having a second person as a guarantor, you are showing that you can be trusted despite having a poor credit history. After all, having an imperfect credit history doesn’t mean that you shouldn’t get any loans; you still deserve a chance to make investments. Therefore, for whatever reason you may need the money for, whether it is to get a new car or boost your business, you are assured of acquiring money from a guarantor loan lender.

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A guarantor loan is no different from a borrower asking for money from a lender. The only thing that stands out here is that there’s a third party involved. Once you make an application, fill in all the paperwork and meet the requirements, your co-signer will receive an email that will link him or her to your account. They would then fill in their own details and sign a document that binds them to the contract.

It is important to note that if you default the agreed payments, your guarantor will be legally responsible for it. They will have to repay the loan on your behalf. Therefore, ensure you can afford the loan before signing your guarantor.

Important things to consider before signing up as a guarantor

As the loan market continually evolves, many borrowers are opting for guarantors. However, taking up such a crucial responsibility and a great leap of faith. Remember, you are taking a financial commitment that will link your finances with someone else’s. If anything goes wrong, you will be left picking the pieces and the bill as well. That is why you should never jump into such an agreement blindly. Have in mind some few things that will help you make the right choice. If you’re looking to be a one’s guarantor, here are some of the things you should think about before making a final decision.

Ensure you find out the real motive behind their borrowing

You probably believe that it is not right to pry into other people’s personal business. However, in this case, how the person you want to vouch for will spend the money is your business, as you’d have to pay up if anything goes wrong. So ensure you know what the money they are borrowing will be used for. For instance, it should be used on ventures that will not be a liability in the long run. If you think the reasons are farfetched and it’s not a good idea or you’ve any suspicions concerning their affordability, then do not hesitate to say no!

Dig deeper

Before you commit to be a guarantor, you need to dig deeper into the reasons as to why the borrower was rejected. Lending institutions have various reasons as to why they deny applications, and not all of them should worry you. For instance, your son who just finished college might not have a significant credit history to qualify for an affordable loan with cheaper rates. He will be forced to approach you due to your good credit record and the strong relationship you have to be his guarantor. In this case, you should be comfortable to vouch for him.

However, someone asking you to be their guarantor for the mere reason of a poor credit history should raise a red flag. In such an instance, ensure you ask the person to explain in detail why their credit history is poor. They should also have a plan on how they will improve their credit history. If their reasons are not satisfying and their plan is poor, gently decline to be their guarantor.

How secure are your finances?

Naturally, you would want to help someone who you are close to, particularly if they’re your family or close friend. However, willingness to help and the ability to help are two different things. Before you become their guarantor, you should assess your financial situation and whether it can really allow you take up someone else’s debt should anything go wrong. Remember, this is a crucial decision that could even ruin your relationship should the worst happen. They would be financially linked to you, and their decisions could have a serious impact on your financial security. Therefore, if you have worries over your stability, do not hesitate to give a sharp no! You do not want to bruise your credit records beyond repair.