MD Lending

There are many different opinions about payday loans. Some people fear them and other people love them and there are lots of opinions in between these as well. This means that if you are deciding on whether to get a payday loan yourself, it can be difficult to decide whether they will really help you or just become a big burden. It is worth finding out more about them and then thinking about your situation and whether you really need the money and if a payday loan is the right borrowing option for you.

What is a payday loan?

A payday loan is a form of short-term borrowing. You can usually borrow several hundred dollars until you next get paid. You will normally need to repay the full amount at once. The loan therefore does not last very long which can be great for those people that do not like being in debt but you will need to find a big chunk of money and then also manage for the rest of the month without that money which can sometimes be difficult. Payday loans are designed for those people that have poor credit ratings. They do not do a credit check and therefore no one needs to worry about this. They can also be arranged very quickly, sometimes within a few hours, which means that they are useful when you need money in an emergency and do not have the time to organise any other sort of loan. Because they are arranged so quickly and they do no credit check and take on more risk, they can be expensive compared to other loans.

Why do I need money?

It is worth thinking about why you want the money and whether it is worth having the loan. Consider what you are buying with the loan and whether it is really necessary for you to have that item. If it is something vital then it could be that the loan is worth it. If it is for something that you could go without, then it is likely that the loan is not worth it. It is not always that easy to know, but discussing it with someone else might help you.

If you cannot decide then find out how much the loan will cost you. This can be hard if you just look at the interest rate, so find out from the lender how much you will have to repay in full and you will then be able to work out the cost by taking away the amount that you borrowed. You can then think about whether you think that the cost of the loan is worth it.

 It is also worth thinking about whether you will be able to manage the repayment. It is a lump sum and so you will need to find a big chunk of money in one go and then manage for the rest of the month without that money. You need to think whether you will be able to afford the loan and then whether you will be able to afford the rest of your financial commitments as well.

Is a payday loan the answer?

It is also worth thinking about whether a payday loan is the right answer to your financial problems. Some people find being in debt really stressful and you have to think about whether this might be the case. This could make it a poor option for you.

 It might be that you have some savings that you can use instead. It can be hard to spend savings as you may want that money to fall back on or you might be planning on using it for a specific purpose but it is so much cheaper to use them rather than getting a loan. You also need to think about whether you can wait for the item and might be able to save up for them instead.

There are also other borrowing alternatives that are worth looking at. If you have a poor credit record your options will be more limited but it is still worth checking to see if there any other options and comparing the price and the terms so that you can pick the one that you think will suit you the best.

It is also worth thinking about whether you are the sort of person that will be able to budget sensibly so that you can afford the repayment and manage afterwards. If you do not do this then you could be in the situation where you will have to get out another loan so that you can manage. This can end being very expensive and so you want to avoid this if you can.

So, whether a payday loan will help you will very much depend on your circumstance. It will depend on whether you really need the money, whether you think it is worth the cost, whether you can manage the repayments and if there are any other options.

Guarantor loans are a type of loan which can be taken out by anyone, even if they have a poor credit score. The fact that there is a guarantor who will make any of the payments that the borrower cannot make, will mean that there is less risk for a lender and they will be more willing to lend. These loans tend to be for larger amounts of money more than a thousand dollars. Deciding whether this is the right loan for you can be tricky. It is worth understanding how they work and then considering the advantages and disadvantages.

How do guarantor loans work?

A guarantor loan is for borrowers who have a poor credit record. In order to lower the risk, the lender will lend them a significant amount of money, usually thousands of dollars, as long as they nominate a guarantor who will be responsible for the repayments if the borrower cannot cope with them. Payments are taken by direct debit as normal but if there is no money available then the guarantor has to pay it instead. They are often the only borrowing option available for someone with a poor credit score that wants to borrow a significant sum of money.

Advantages of guarantor loans

A guarantor loan will enable someone who cannot borrow money by other means to be able to borrow. This can be really useful if they need something desperately, perhaps a repair a repair on their home, a car to get them to work or a training course to improve their career prospects. Having access to money like this can really help to open up opportunities that would not have otherwise been there.

Disadvantages of guarantor loans

The first hurdle with a guarantor loan is that you have to find someone who is willing to be a guarantor for you. You will need to find something that is close to you and therefore willing to help you and who has a good credit score – as the lender will check. You will need to think carefully about the person that you are considering. Think about how it might affect your relationship with them if you rely on them like this and also think about what might happen if you do miss a repayment and they have to pay. It can be really tempting to just assume that you will be able to make the repayments and is this is not something that you will need to worry about, but you need to think about what might happen if you cannot. Discuss this with them as you might have the expectation that they will just pay it for you but they might expect you to repay them as soon as you can. This can lead to problems between you, especially if they suddenly need money and you cannot afford to repay them, so make sure that you have a written agreement so that you can refer back to it if you disagree about this sort of thing.

Even though you have a guarantor, the lender is still taking a risk lending to you as you have a poor credit score. It will cost them to try to take money from you and then to try to take it for your guarantor and it will also cost them more to set up the account because they will have to check out both of you. This means that this type of loan can be quite expensive compared to other loans, which require a good credit score, that offer this sort of money. It is worth looking at how much it costs and thinking about whether you think that it still offers good value for money or if you think that it is worth paying that extra cost for whatever it is that the loan is for.

All debts also come with risk. There is a risk that you will not be able to repay the loan. Although you have a guarantor to repay it for you, that is unlikely to be a situation that you want to be in. You will also find that you credit score will get even worse if you do not make all of the repayments. It is therefore well worth finding out how much you will be expected to repay so that you will be able to see if it is an amount that you can afford. You may be able to choose between loans and find one that has a lower repayment amount if you think that this will help you. You are likely to have to pay more for a loan with lower repayments as you will have to repay it over a longer period, but it can be worth it if It means that you will more easily be able to manage.