Once upon a time we lived in a world where credit was cheap and what’s more there was plenty of it. Up until the credit crunch hit the British economy, mainstream lenders such as banks and building societies were a great deal more willing to grant loans, credit cards, mortgages, and overdrafts to consumers who needed a quick cash injection, even those with less than perfect credit. How times have changed!
Mainstream lenders have closed the doors to those with poor credit
The financial environment is a different playing field these days, and if you want to be accepted for a loan or credit card with one of the big high street lenders, then chances are that you will not get a look in unless your credit score is flawless. If you are one of the many millions of UK consumers who has poor credit, than chances are you will have either used a payday lender to get the money that you need to tide you over or cover that large expense, or at least been very tempted to do so. After all it cannot be denied that they are extremely convenient, seeing as they can pay money into your bank account with no questions asked in less than 10 minutes. In fact if it wasn’t for the ludicrously high interest rates, which for example would see you pay over 5000% APR on a Wonga loan, they might in fact be the answer to your borrowing needs.
Struggling with payday loans? Use a guarantor loan to consolidate your debt
Sadly, many people in the UK have been seduced by the convenience of payday lending and have quickly found themselves in over their heads when unforeseen circumstances prevented them from paying the loan back. Well, that or they were forced to ‘roll over’ their loans; an action which can quickly turn a £500 loan into a £1,500 one. If you are one of the many who have fallen prey to payday lenders and are in something of a spiralling debt problem which you cannot climb out of, the answer to your troubles might be to consolidate your debt. Whether you have one, three, or five payday loan debts hanging over you, consolidating your debt by taking out a large, lower interest loan will allow you to pay off the payday lenders in one swoop, as well as pay back the money that you owe in much more manageable monthly repayments. This is something that you can do by taking on a guarantor loan.
What is a guarantor loan?
A guarantor loan is another form of alternative lending, which unlike payday loans will allow you to borrow the money that you need, minus the extortionate rates of interest. The only condition that is attached to this is that you will be required to find a friend or family member to sponsor you by acting as a guarantor loan. In short, if they trust you, so will we. You will be able to borrow anywhere between £1,000 to £7,500 over a one to five year period, which means that a guarantor loan can be taken on as a short, medium, or long-term option, depending on what your circumstances dictate. Importantly, a guarantor loan will much cheaper to repay than any payday loan out there, and if you were to borrow £3,000 to pay off your payday loan debt over three years, you would pay the money back in £143.98 monthly instalments, which works out to 47.9% APR. Compared to the payday lenders which charge you £25 in interest for every £100 borrowed, this is a great deal cheaper.
So if you are in trouble with the payday lenders, don’t panic, and take charge of your payday debts by consolidating with a guarantor loan.