All Posts by Duncan Tracey

How To Get Loans With Guarantor Non-Homeowner?

Modern banking systems provide a large scale of credit options that vary extremely in the total amounts of landed money, as well as in terms of credit use and repayment. A guarantor loan lender will allow you required an amount of money if they are convinced that you are capable of repaying it or if you have provided ways for lenders to get repayment in other ways aside your profit. Most loans are secured with your or your guarantor’s property. With the increased number of people not possessing their own homes, clients frequently ask about the options to get loans with guarantor non-homeowner.

Basics of unsecured loans

Roughly divided, there are two types of loan you can apply to. The so-called “secured” loans are usually granted for huge amounts of money and this type of credit imposes some strict terms. If submitting an application for the secured loan, you have to be a homeowner, your guarantor has to be a homeowner too, there shouldn’t be traces of bad credit loans history in your record and the lender will provide you with 7500$ or more. These criteria are becoming hard to meet for too many people and the non-homeowners are put in an unfair position. Just because a borrower doesn’t possess a property or real estate, it doesn’t have to mean he won’t repay the debt timely using only regular income. Realizing this, some lenders are offering “unsecured” loans that entitle non-homeowners to credits too. The basic idea is that non-homeowner guarantor loan doesn’t require you or your guarantor to possess any property when applying for a loan.

Criteria for non-homeowner loans

Since unsecured loans aim to provide people without property with the same chances and opportunities as homeowners, relying on their responsibility to repay it back in the stipulated time frame, the basic idea is the same. You will submit the application, require a certain amount of money, provide the contract in which your guarantor accepts to come first and pay off your debt if you fail to do so and the rest is up to the lender. However, the benefit of the unsecured loans is that neither you or your guarantor need to possess property. This loan is approved to tenants or people still living with their family or friends as well. This loan system, also, allows you to apply for the money even with a bad credit loans history.

Cons of loans with guarantor non-homeowner

This loan model is created by lenders to allow non-homeowners to participate in the credit system without mortgages or other legislative manners of securing the loan, which makes it the perfect opportunity for those who are at the beginning of financial development. The major downside is the limited amount of money. Non-homeowners are allowed to apply for loans up to 7500$, providing only proofs of their and their guarantor’s regular income. There is no age limitation, as long as you are over 18 and your credit history is clean.

What is the Guarantor’s Responsibility?

When applying for most types of loans, with an exception of some bad credit loans, lenders will require you to find guarantor to co-sign the contract and accept guarantor responsibility. These responsibilities vary depending on the loan you choose, but in each case guarantor is a lender’s way of securing lent money. The chances are you will need a solid guarantor and he will have to meet higher criteria if you apply for some big amount of money. However, when applying for quick and short-term loans, many lenders won’t require the presence of a guarantor. So, who qualifies to be guarantor and what does a guarantor need to provide.

Who’s eligible to be a guarantor?

The guarantor is, by definition, a person signing a loan contract along with a borrower and accepting to become liable to repay the borrower’s debt if the borrower fails to do so. The lender turns to the guarantor only after all other means of getting the borrower to fulfill financial duties fail responsibly. Therefore, the guarantor is often the last option for the lender to collect its provided loan before charging the borrower for bad credit loans. If guarantor also fails to repay the debt, credit score decreases to him as well. Considering all of this, the guarantor is usually a person closely related to the borrower and financially steady enough to secure lent loan. Depending on the loan model borrower chooses, the guarantor is required to meet various criteria.

Guarantor responsibilities

Since loan lender turns to guarantor’s debit account to repay lent loan once the borrower has defaulted, the guarantor has to be a person with regular incomes high enough to provide sufficient amount of money at the debit account during every month. Hence, valid proof of employment and regular incomes provided to the lender is the first thing guarantor is responsible for. If the borrower is applying for bigger amounts of money via more rigorously regulated loan system, the lender may set request for the guarantor to be a homeowner. The guarantor who possesses real estates will go through the process of property validation and the lender will estimate the total sum that could be recollected by mortgages and auctions if the guarantor fails to repay the debt as well. In all cases except for some bad credit loans, the guarantor has to have a clear credit history and the more positive credit score the better terms for the loan.

Should you be a guarantor or not

There’s no straight answer to this dilemma since it all depends on the specific situations and individual relations. Before accepting to be a guarantor, make sure you are fully aware of all the responsibilities and obligations you will be liable of and make a reasonable estimation if you are capable of coping with them. Also, make an objective judgment of borrower’s situation, behavior and life circumstances. Only when you trust your borrower enough and see real methods of repaying the loan, feel free to become a guarantor.


How do I Cancel Guarantor Agreement?

If you have become a guarantor, that means you’ve been generous and probably helped someone to achieve some important aspects in their lives. However, this kind and good deed mean that you are burdened with a heavy responsibility of repaying back the debt if the borrower fails to do so. In fact, whether you are capable of repaying the given money at the time or not, you will come first if the borrower quits repaying and if you also fail to repay it, your Cibil score will decrease significantly. You might consider canceling guarantor agreement since this might prevent you from getting credit at the moment when you need it. These reasons often pressure people to consider opting out of being the guarantors. This, however, is not so easy to do without getting in legal troubles, but there are some ways for safe canceling guarantor agreement.

The procedure of canceling guarantor agreement

If you decide to stop being a guarantor, the option of settling it personally with the borrower is not allowed. You have to contact the lender directly and submit an application to be relieved. You have to state and prove your reasons for opting out, and the mere outcome is solely up to lender’s decision. If you succeed in opting out, the bank will provide you a discharge letter and you will no longer be obligated to compensate for the debt. Here are some options you can use as the valid reason to quit being a guarantor.

Repayment by borrower or substitute guarantor

These two methods have the greatest chances of being accepted by the lender and unburden you from liability without damaging your Cibil score. Considering the fact that you are probably in close relation with the borrower, you should analyze the ways to convince him to repay the debt himself. Either by creating an extra source of profit to him or by asking other friends and relatives to support him. If the borrower repays the debt timely, you’ll be safe from being charged immediately after the deadlines expire. The other way is to find substitute guarantor. Generally speaking, the lender is primarily interested in getting the debt repaid, how and who exactly is going to repay it is less important. If you manage to change the seats with another guarantor, the chances are the bank will release you willingly.

Rely on legal tricks

There are, also, some useful options based on legal alternatives you may test when opting to quit being a guarantor. State and prove to the lender that the borrower has taken an additional loan aside the one you are guaranteeing for, but the second one was taken without your consent. Also, you can submit the application to the bank stating that there were no signs that borrower will avoid repayment at the moment when you signed the guarantor’s agreement. These options are slightly vague, but sometimes bank takes them as a valid reason to release you or at least to cut you some slack.

Benefits Of Guarantor Loans From Direct Lenders

Depending on your overall financial situation, the total amount of your average income, whether you possess property or not, whether you have a bad credit loans history and how is it going with your guarantor regarding the same criteria, you are free to choose from wide range of loan models. Regardless of the loan model you opt for, you need to choose whether to go for guarantor loans direct lenders or to involve broker’s service in between you and a direct lender. These two ways of realizing your credit application are available for unsecured loans, secured loans, bad credit loans, short-term loans, and every other loan model. Both options have pros and cons and the right decision depends on the specific traits of your situation.

How do guarantor loans direct lenders function?

As you can assume, the whole process of applying, analyzing, approving, transacting and repaying the loan is conducted directly between a borrower and a lender. This primarily means that you will have to reach out and find a suitable lender for your situation on your own. This might require a certain level of education regarding the matter and information check-up, since not every direct lender provides loan models acceptable to you. Once you pick the lender, submit the loan application directly. The lender will estimate your request, require proofs of your incomes and depending on the type of loan you’ve applied to, might require proof of the property you possess. These same criteria will go for your guarantor. If you opt for non-homeowner loans, proof of incomes will suffice. If the lender concludes that requested loan is affordable to you and that your property or incomes are sufficient to assure regular repayment of the debt, they will provide a contract that you can adjust in some minorities directly with the lender.

How do guarantor loans via broker function?

An alternative to the guarantor loans direct lender is to hire a reliable broker to intervene between you and a lender. Some borrowers opt for this strategy, mostly because they want someone experienced to research potential lenders on their behalf and do the majority of negotiations. If you decide to hire a broker, look for the licensed, authorized, reliable loan broker with transparent terms and fees. The broker will contact dozens of direct lenders and narrow the choice down to those that suit your situation best. Two main downsides are various fees most brokers charge for their assistance and prolonged time between submitting an application and actually reaching money due to third part involved with negotiations.

Are guarantor loans direct lenders better option?

There is no uniform answer to this since it all depends on your specific situation. However, in most cases you should opt for contact with direct lenders since you won’t pay any additional fees, you’ll save some time, be able to directly adjust the final contract and estimate the validity of the loan deal.


Does Being a Credit Guarantor Affect Your Credits?

Agreeing to become a credit guarantor and co-sign loan contract is merely generous and noble deed, especially considering the fact that people usually accept the role of credit guarantor to support financially their spouses, families and close friends. This is particularly important to those with low incomes and bad credit loans history, but in the need of financial support in the long run.

What does it mean to be credit guarantor?

Being a guarantor means that you are legally obligated to step in when a borrower defaults and to conduct repayment of the lent loan on borrower’s behalf. Since you will become liable for the refunding of the total unpaid sum to the lender, there are usually legal strings preventing you from avoiding these obligations. Breaking those rules will lead to various penalties and in the worst scenario to legal sanctions with long-term consequences. On the other hand, if your trusted borrower repays the lent loan in the stipulated time frame, you may be a credit guarantor without ever having to deal with it in any way. Which scenario will happen to you depends on numerous aspects, but being a guarantor has the potential to affect you in many ways.

Positive effects of being credit guarantor

The first and the most obvious positive effect of accepting to be someone’s loan guarantor is the opportunity to support someone financially, to help someone go safely through tough situations and to help someone invest into any form of new change in life. Since borrowers are usually closely related to the guarantor, being a guarantor often effects directly the mere guarantor. The best example is being a guarantor to the relative and assisting him in gaining the loan to invest into a new home. The home where you might spend time in the future. Also, if the lender, after all, turns to you to charge borrower’s unpaid debts, you can still save your credit score by sticking to the deadline and placing payments timely. This will go to record and show to your future lender that just because the borrower wasn’t reliable enough, it doesn’t mean you are too.

Negative effects of being credit guarantor

Unfortunately, there are more negative effects than positive ones. If the borrower defaults, the lender will go for your debit account and draw the required money regardless of your current balance check. If it happens that you are not capable of repaying this debt, the lender might auction your property and other assets to compensate for the missing money. This will certainly affect your current budget in a long run and it might even burden you with significant mandatory expenses per month. Also, if you default to repay the debts, the lender will report this fact and decrease your credit score, which will lower your future chances of getting loans lent for your own needs.


How To Use Guarantor Loan Calculator

When submitting your application to the lender in an attempt to gain guarantor loan, you will come across very different lenders’ policies when it comes to client evaluation. Depending on the type of the loan you are applying for, the lender will consider a wide range of various criteria and aspects to determine whether you meet the required standards to become a borrower. Unfortunately, too many lenders use significantly different evaluation criteria, which results in too many potential clients being turned down a few times before contacting the lender that suits their capabilities. To avoid that, use guarantor loan calculator to estimate your true limitations before reaching out for the lenders.

What is guarantor loan calculator?

To assist people considering an application for guarantor loans, financial experts designed a wide range of similar applications that are meant to help you calculate precisely your limitations and to determine the best loan model and the acceptable direct lender for your situation according to the calculation results. Depending on the type of the loan you are aiming at, various parameters will play a role, but most lenders consider a few main aspects when evaluating potential borrowers. They consider your borrowing power, your credit score and your loan repayment capacity.

Borrowing power calculator

Borrowing power guarantor loan calculator is a specialized application designed to help you estimate the maximum, minimum and optimum amount of money you are financially capable of borrowing from the loan lender. When calculating these amounts, the calculator will request some data that influence your borrowing power and the more precise data you enter, the more realistic estimation you will get. For example, if you are considering applying for the home loan, you have to calculate with the number of adults and number of children involved, the size and location of the residence you are looking for, the type of loan you’ll be applying for and many more parameters. This result will narrow down the choice among lenders to only those ready to allow you the required amount of money.

Credit score calculator

This application includes various data regarding the amounts of your previously used credits, the purpose of the loan you are applying now, desired loan amount, evaluated property and assets and all the pluses and penalties you’ve been given during past periods of repayment. If the calculator shows that your credit score is way too low for many loan lender standards, you may consider several options to increase the value of your credit score.

Loan repayment calculator

By analyzing loan amount, given period of time for repayment, interest rates and fees, loan repayment type and frequency, as well as your average income, this application will provide you with various schemes for repayments that you will be capable of refunding regularly and timely without burdening your everyday budget too much.


How to gain poor credit tenant loans

Tenants with poor credit history carry a double burden. They are financially highly unstable with bad credit history preventing them from accessing regular loans. At the same time, they are tenants, which means they do not possess property that any direct lender could use to secure the loan. Regardless of their average monthly income, many of these people need some financial support and that’s where the bad credit tenant loans come as the best solution. These financial strategies are tailored for people in this type of situation and the requirements are designed to suit the possibilities of financially troubled non – homeowners.

Benefits of tenant loans

Tenant loans are becoming rather popular lately and the market is crowded with short-term loan lenders providing loans for tenants with bad credit history under various conditions. Three main traits of tenant loans address the biggest issues this target group of borrowers struggles with. After applying for this type of loan, you’ll be granted small to moderate amount of quick cash which should support you during the financially hard time. Lenders providing this model of loans usually don’t evaluate your credit history, which will prevent your bad credit score from sabotaging you continuously. Finally, you don’t go through property validation phase, hence you don’t have to possess house to secure this loan.

Downsides of tenant loans

The main downside of this type of loans refers to high-interest rates and various fees attached to the financial package. Total percentage of fees varies among lenders, as well as the interest rate, but you can increase or decrease the interest rates by prolonging or shortening time frame among repayments. Another downside includes a high risk of running onto a fraudulent tenant loan lender and since the number of these companies increases, precaution is recommended.

Steps for applying for tenant loans

The first thing to do is a precise calculation. Estimate the amount of money you need, but also make a realistic estimation of the amount of money you’d be capable of repaying per month. With bad credit history, you don’t want to burden yourself with another credit you cannot afford. If you are planning to apply for the online tenant loan, do the research and find a reliable lender whose requirement you can meet. Application forms are usually found at the web pages of tenant loan lenders and all the personal information provided here is strictly confidential between you and your lender. You might be asked to submit your ID or social card, but most lenders don’t go deep into the evaluation. Tenant loans are usually approved in few days, but sure to check the financial background of your potential lender, their license and the precise terms of repayment before you sign the contract and take the money.





How to Start a Payday Loan Business

Payday loan businesses are gaining quite a popularity lately, in spite of slightly negative associations attached to this loaning model. Namely, the basic idea of this business is to provide short-term loans to the borrowers in a financial urge, but with pretty high-interest rates. Along with loans for bad credit, this business model is somewhat controversial, but since it truly is the last option for many borrowers, more and more people are interested in how to open a payday loan business. This quick cash comes as an ultimate solution for many people in serious financial troubles, the downside includes high-interest rates, many fees involved and often not enough transparent terms of use and repayment. Payday loans are usually limited to relatively small amounts of money, for example up to 500 or 1000$, which makes it bad cost-benefit ratio for many borrowers, but often the only available solution. Hence, from the point of view of someone considering to open a payday loan business, it is a lucrative idea.

Steps to open a payday loan business online

Payday loan businesses emerged in many locations as the actual companies settled usually in the neighborhood with the low average income among people. However, many people are opting for an online business option, which only relieves you from renting the actual offices, most other steps required for starting this business are the same. First, you will need a startup amount of money, which means that you personally are entitled to the loan, unless you already possess the money. If counting on the loan, turn to the trusted lender and try using guarantee provided by Small business administration or similar institutions. To achieve the startup money and all required licenses, you’ll need a detailed business plan with all the legal and technical aspects analyzed and explained.

Careful with laws, rules and regulations

This field is controlled by a wide range of strict federal, state and local laws and regulations and be careful to meet all these requirements since the penalties can be significant. Probably the best option is to hire a lawyer to navigate you through these rules. Also, get familiar with the local rules, since various states limit payday loans to a certain total amount of money.

Determine clear terms of use and repayment

You are obligated to be clear about the amount of money you will lend, about all the fees and interest rates included, as well as the precise set of criteria potential borrowers need to meet in order to qualify for the loan. Determine the ways you’ll use to check the eligibility and reliability of potential clients. After all this is set, invest in quality advertising and you’re ready to work.


How To Purchase Payday Loan Franchise

The industry of guarantor loan lenders is constantly growing, diverging and branching, with more options provided, more lenders emerging and more potential borrowers considering this way of solving their financial troubles. Classic loan models including big amounts of lent money, thoroughly evaluated borrowers and their guarantor with strict regulations and criteria are still dominantly being operated by banks and powerful institutions as the direct lenders. However, the system of payday loans is becoming quite popular and many borrowers opt for this option. Consequentially, many people consider purchasing payday loan franchise like the way to start a small business as payday lenders.

Characteristics of payday loan franchise

In some way, working as a payday loan lender is like running any other small business, but there are some specifics attached to this job. Namely, the idea of payday loan system is to provide borrowers that have low income, bad credit loans and no financially suitable guarantor with a small, but quick loan at the cost of relatively high-interest rates and fees. Considering the target group of this loan system, purchasing payday loan franchise means that you are taking up business centered around poorly evaluated clients, with a great risk of having troubles repaying and recollecting your landed money. On the other hand, quick lending cash with high-interest rates can be a quite lucrative business.

How to pick a payday loan franchise

The easiest way is to search the advertisements and monitor loan market looking for suitable payday loan business you can afford. Instead of purchasing a complete business, consider purchasing solely franchise and staying attached to the mother company. This will enable you to copy business structure, regulations, employees’ training, evaluation of the clients and many more aspects of the business. Opt for the developed and steady businesses that run for years instead of high risk newly founded payday loan companies. Analyze the company’s overall success in recollecting debts, interacting with clients, negotiation outcomes and all other aspects suggesting the quality of the company’s activity and financial stability. Carefully go through balance sheets, budgets and financial reports to see the cost-benefit within the business, but also to estimate if the franchise is affordable to you.

Purchasing procedure

Consider applying for the loan yourself to gain the money for investment. There are many lenders willing to provide loans to small businesses if you submit valuable business plan and strategy of repayment. Once you’ve collected the money, check for the debts included into franchise and construct a contract that releases you from taking over previous owner’s debts. Contact the business manager or lawyer and go through negotiations carefully clarifying all details regarding your rights and obligations as the new owner.