There are different methods that you can use which could make it easier for you to repay your guarantor loans. The loans can be extremely useful for allowing those with a poor credit record be able to borrow money, but they need to be repaid just like any other loan. It is good to think about how you will do this so that you are prepared and there are some things that you can do to make it easier as well.
How do repayments work?
With a guarantor loan, the repayments are made monthly. The borrower will be expected to make the repayments as they will for any other loan. However, they will have a guarantor so if they do miss a repayment, the guarantor will repay instead. The way this payment is organised will be set up by the lender and could vary between lenders. There may or may not be extra charges involved and who pays these may also vary. However, you will probably want to work really hard to make sure that your guarantor does not have to make those repayments. It is likely that you will want to make sure that you do everything that you can to make sure that you make the repayments yourself.
How to make repayments easier
There are different things that you can do which will make it easier to ensure that you can make those payments.
- Choose the right loan – when you are looking at different lenders have a look at how much you will be expected to repay each month. Think about what you can afford and pick one that you think you will manage. You may find that the loan will be more expensive because you will be repaying it for longer or you might not be able to borrow so much money. However, if you are more easily able to repay it, then this could be worth it. There are lots of lenders to compare and it is worth considering them all to find the right one for you.
- Budget carefully – it is really important to start budgeting carefully when you have a financial commitment like this. You will need to think about how much you think you can afford anyway, but you may also need to be careful with where else you are spending money. Make sure that you prioritise your spending so that you pay for the important things first. For example, make sure that all your bills and loan repayments are paid and you buy food before you buy any treats. It can be helpful to set up all your bills to be paid by direct debit just after you get paid. Then you will be able to ensure that the money is there to pay them and you know what is left will be there for you to spend on food and luxuries.
- Spend less – it might be necessary for you to start spending less money. You might need to think about where you might be able to cut down. You might eb able to compare prices on things like utilities or insurance and be able to switch providers and save money. You may also be able to swap retailers so that you are paying less for things like food. By paying less for what you normally buy, you will not feel like you are depriving yourself but you will still be saving money. It might be necessary for you to buy less as well though. It can be worth asking yourself whether you really want certain items so that you can carefully decide whether you want to spend that money. It might be that you can cut down quite easily.
Earn more – earning more money might sound difficult, but there might be some ways that you can get more money that would not be too hard for you. If you have the time, for example, you might be able to work more hours in your job or take on a second job so that you can get more money coming in. This is not always possible of course, but there might still be other money-making options. You might be able to do some work from home to make extra money, such as freelance or online work, which could help while you are looking after family members and things like that. It could be possible to rent out some of your home to make some money or to sell things that you no longer need. Another possibility is to monetise a hobby that you have, so perhaps sell things you make or produce online tutorials and things like that so that you can make money from something fun. There are plenty of things you could try out if you really want to.