Five Common Reasons for Rejection of Guarantor Loans

One of the best ways to assist your small and immediate financial needs is by getting a guarantor loan. Guarantor loans are a contemporary form of loans that involve a middle man in the process. The middle man or the guarantor is the person who willingly takes the responsibility of paying your lender the loan amount in case you fail to pay.

However, just like all the other types of loans, guarantor loans are also a subject of rejection in case certain requirements are not met by either the guarantor or the borrower of the money.

Following are some of the most commonly found reasons linked to the rejection of a guarantor loan.

Bad Credit Rating

Although guarantor loans don’t usually take the financial condition of the borrower into account, there is a possibility that if you have a very bad credit rating due to history of bankruptcy, your application might be rejected. On the other hand, the credit rating of the guarantor matters a lot. Since a guarantor is held responsible for paying back on your default, lenders make sure it is someone who has a very good credit rating before loaning the amount.

Another thing that could potentially lead to a rejected application is not a having a credit history at all – especially for the guarantor. The lenders will be unsure if their loaned amount will be returned, let alone the interest applied on it.

Excess of Loan

If you already have a mountain of loan over your head, you are likely to be rejected for a guarantor loan, regardless of how good the history of your guarantor may be.

Insufficient Proof

Both the borrower and the guarantor are required to earn a minimum of 400 pounds a month whether it is earned by being employed, or self employed. Furthermore, both of you must also make sure to provide a sufficient proof of income to the lenders. Without proof, it is almost impossible to get this loan.

Rejected Applications from Other Institutions

It is difficult to get a guarantor loan granted in case your credit history shows several previously rejected applications. Such applications raise doubts about your ability to return the loaned amount. Therefore, a good way to get around this issue is to always prepare your application and lessen as much negative points on it as you possibly can before applying, while opting for a guarantor who has an excellent credit history.

General Requirements

Failure to fulfil the general requirements for the application can lead to a rejection of your guarantor loan application. Some of the general requirements for a guarantor loan application include the following:

  • Applicant and guarantor must be residents of the United Kingdom.
  • Both should have a bank account in the UK.
  • Both of them should be over the age of eighteen.
  • Both must be free from any financial links with each other.

It is not necessary that the reasons mentioned above will definitely lead to a rejected application. There are certain guarantee loan providers who believe that every person should be given a chance to prove their improved financial abilities and they may be able to help you out.…

Making Realistic Financial Goals—How Important It Is For You

If you fail to plan, you are planning to fail. Most people who may be experiencing financial troubles have one thing in common. They fail to set proper and realistic financial goals. If you know where you are headed you are more motivated and excited. The same is the case with financial goal setting. Once you have set your goals for the future, you will be driven to follow it to the core, unless they are unrealistic. Unrealistic goals can be spanner in the works for most people.

The key to financial goal setting is setting goals that go from smaller targets to bigger ones and making sure that the goals being set are realistic. Your will to follow the goals being set depends on your motivation. The smaller the goals and the easier they are to achieve the more motivated you may be.

Getting a Sense of Direction

What would happen if you choose to walk on a path that you have no idea about? You will feel reluctant and unsure about your future. You will lack the motivation to walk on it and most importantly you won’t know where you are supposed to end up. Lack of clarity can be the single biggest undoing of your finances. Lack of clarity breeds insecurity and insecurity is the reasoning behind rash financial decisions.

On the other hand, if you are able to set realistic financial goals you will have a sense of direction. Not knowing what to do with your money is bad. Once you have set realistic goals you’ll know what you have to do in the coming months, weeks or year. You will have planned for your future. Realistic financial goal setting is like drawing up a path for you to walk on where you have thought about the destination that you wish to reach.

Realistic is subjective

When you are setting your financial goals it is important that you know that realistic is a subjective term. What is realistic to you may not be realistic to someone else. This is why it is important that you set your financial goals yourself. Setting financial goals yourself is also important because nobody will know your financial state better than you. You know what you like to spend your money on, where you plan to see yourself in future and how much can you realistically save. All of these factors are important when setting financial goals.

What Can Financial Goals Achieve?

These are some of things that financial goals can help you achieve:

Setting realistic financial goals holds utmost importance for businesses and individuals alike because it is similar to creating a budget and it allows you to plan ahead and for the future.…

Troubles of Using Peer-to-Peer Loans – The Process Debunked

Peer to peer lending is all the rage. Nevertheless, before blindly jumping on the P2P lending bandwagon, here is what you need to know.

The peer to peer lending industry in the UK is growing in popularity over the past decade to an extent that the UK is considered as the leading countries in peer to peer lending across the globe. The industry has quickly become the biggest sector in the UK ever since 2005, when Zopa was launched. There are over 40 peer to peer lending platforms have been launched in the industry and there are new players emerging in the industry as well.

The P2P lending sector in the United Kingdom also known as the Crowd-lending sector lent about £480m in the year 2013 as per records of P2P Finance Association. Approximately 60% of the total amount given in loans was lent to the retail customers, whereas, about 40% of that total amount went to business borrowers. The P2P lending sector in the UK is expanding rapidly and according to the most recent estimates it could grow to a whooping £12 billion-a-year within the next 10 years.

In order to benefit from P2P lending, you need to take into consideration all facts and some prior knowledge about it. These loans can be one of the best ways to solve your money issues and you would not go broke if you make repayments. So, if you are looking to benefit from these loans, check out these facts:

·         These are Authentic Loans

A number of people do not consider peer to peer lending because the process completely excludes banks from the equation. However, these loans are not only legitimate, these are officially regulated by the Securities and Exchange Commission in the UK.

·         The Approval and Funding Process

Unlike traditional loans, peer to peer loans work in a different manner. Once the lending service approves your loan, the loan is put on the lending platform and lenders invest in it. Therefore, the funding is done by peers for the loan. There can be as many as 10 to 30 lenders per loan and the number can grow up to 100 lenders per loan. The borrower makes monthly payments for the loan which is then distributed among peers. If the loan doesn’t attract enough investors, it could be rejected by the lending platform, but it happens rarely.

·         Quick Funding of Loans

Perhaps the best part about peer to peer lending is that you can apply for it online whenever you are in need of a loan. You can conduct your own research online, and then apply for a loan. The process is simple and easy and literally takes a few minutes. In some cases, P2P lenders ask for income verification, however, this generally depends upon your credit history and your loan amount. It will take about 4 to 5 working days for you to get approval and the funds will be used in your account within the week.

·         Lower Interest Rates

Credit analysts acknowledge the fact that peer to peer lending is better than credit cards and people are using P2P lending to get low interest rates and manage their credit card debt. The best part about P2P loans is that you get fixed loan for fixed interest rate, which is easier to manage.

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What Are the Various Categories of Personal Loans and Their Usages?

Loan products over a number of years have increased dramatically and a lot many people look forward to them. In the current recessional phase, people are seen stuck up in financial emergency and thus they wish to resolve them. Interestingly, various entities took part in creating the financial products including risk management professionals as it was necessary to break down, enhance and create loan services and products just to keep the money fluid in the marketplace. As the important part of general finance, personal loans have great utility for people. To find out the various kinds of personal loans, read below.

The advent of the signature loan clearly demonstrates the advancement in loan processing. As the name signifies, the signature loan is the one where the person applies for the loan and just signs a promissory note to pay back the loan within the stipulated time period. 

The time which is specified is called the loan term.This may be 6 months or even 5-7 years, depending on the parties involved. Anyone willing to take signature loan will need to have a great credit history. The borrower’s assets are not considered to that extent. 

The rules and regulations vary. Certain loans need the borrower to have a good credit history while others need both sound credit score and accounting for asset. Documentation is required to show the number of assets held by the borrower.

  • Payday loans have become most popular in today’s time. The market of cash advance loan or payday loan is getting popular since the borrower gets quick access to cash amount. Apart from this, the borrowers need not have a sound credit score. Least bit of credit criteria is needed for the approval process of the loan. Just by submitting identity proof, proof of income, residential proof and other documents, the approval will be attained. Most of the companies offer this kind of loan without any documents and proofs.
Cashing Facility
It has the major drawback that the interest rate is higher here when compared to other kinds of personal loans. You can enjoy cash advances from check cashing facility, ATM machines, etc.
Meet The Needs
Credit card loan is the popular form of personal loan which is also known as cash advance credit card loan. The loan process is again very quick and the general public can meet the emergency needs instantly.
Meet Expenses
Wedding loan is the latest kind of personal loan which helps one meet wedding expenses. It has carved out its niche in the loan industry as it meets the wedding expenses on your behalf.