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Bad Credit for Christmas? Not A Problem

Well it’s official, it’s nearly Christmas time… according to shops at least. The infamous Coca-Cola truck has been spotted up and down the country. The Christmas stock has been shipped and primed for the festive season. Most retailers start rolling out their decorations and seasonal gifts around the end of September to cement in your mind, that Christmas is coming. Never mind Halloween and Guy Fawkes Night in-between, the big Christmas marketing plan is already in full swing.

The public is subconsciously being warned of the impending festivities and the collective thought in everyone’s head is looming – the question of… how much is THIS Christmas going to cost? According to a survey by the Office for National Statistics, the country’s total average spend for Christmas totals up to £21 billion.

In 2015, a survey on the cost of Christmas by ONS found that, on average, the spend for Christmas, per household, in the UK is £753. Including presents for friends and families, the cost of food and drink, decorations, other Christmas experiences, parties etc. It all adds up to a costly season.

Christmas Savings vs. Empty Pockets

Time to take out the hammer and crack open the piggy bank. Sadly, counting your coppers and silvers may not be enough this year. For the readers wondering and panicking over where this money is going to come from, take a breath. Whilst it’s probably too late to start saving huge amounts ahead of the Christmas season, it’s not too late to explore other alternatives.

One way to manage the expenses surrounding Christmas would be to take out a loan, the only problem is, what kind? Payday loan companies charge staggering amounts on their repayment rates and banks won’t take a second look at you if your credit history is poor. Other high street lenders will rely on credit ratings as well, and you may not get the deal you deserve. Lenders like these will only offer secured loans, meaning they could ask for your property as collateral against the loan. But, fear not, there is one more path you could take. A guarantor loan…

What is a Guarantor Loan?

Now, the first and most important piece of advice is to always seek independent financial advice before taking out a loan. Consider all your options and check your credit rating, as a guarantor loan is a preferable loan for those with a poor credit score.

If you’ve got this far, then you probably have realised that your credit score isn’t great. But, no matter, because you’ve also realised you don’t have to take out a costly loan with high APRs just because you have bad credit. A guarantor loan is probably the most viable and safest option for a loan, especially to fund Christmas expenses.

I hear you ask, what is a guarantor loan? Well, simply, it works differently than a regular loan. Guarantor loans are lent through trust based lending, no credit history required. All the requirements are for a guarantor loan, according to loan provider TFS Loans, is that you’re employed and have a guarantor willing to co-sign the documentation with your application.

Your guarantor can be a family member, friend or even a partner, they only need to trust you and agree that should you be unable to make repayments on your loan, they can cover the costs for you. A guarantor needs to be happy to agree to this, along with having a good credit score and being aged 18-78 (if they’re a UK home owner it’s a plus but not a requirement).

No surprising bills… just affordable repayments

The longevity of a guarantor loans means that repayments are affordable, as they are spread over a longer period. Stretching the repayment means no unexpected bills in January! The loan repayments will never increase in price, and there is always the option to pay back the loan in full. With guarantor loan companies there are usually no hidden costs or charges – always check the T&Cs of your loan application.

Being an unsecure loan, means that guarantor loans do not require you to take out the money against your property or possessions – you don’t even need to be a homeowner to take out a loan! All that you need is a guarantor who trusts you and is willing to support your application. As long as your guarantor trusts you, so will the lender. Borrowing money is an important decision, so always seek independent financial advice. Taking out a loan you cannot afford to repay can cause you serious money problems.

Whilst most people think being a guarantor for someone carries a lot of weight, it’s not as much as you think. Guarantor’s may panic about their own credit score and wonder how this will be affected by signing documents to support an application. The short answer is – it won’t. All that guarantors need do, is be willing to cover any repayments the borrower cannot afford to make. By no means is the guarantor liable to repay a loan in full. Meaning a friend or family member will only be responsible, should you be unable to meet a monthly repayment, for whatever reason.

If you are seeking a guarantor loan you must be employed. Loans companies, like TFS Loans, Amigo Loans and Buddy Loans, will not approve an application if you are unemployed. Most loan companies will accept full-time, part-time and self-employed applicants.

Money for Christmas and Life!

Guarantor loans are a more effective and efficient way of borrowing money when your credit score is less than desirable. The repayments can be spread over a longer period and have significantly lower APRs than payday loan companies.

Most loan providers can lend anywhere from £1000 – £15,000 (which may be a little excessive for a single Christmas). With the average cost of Christmas totting up at £753 for the average household, £1000 therefore, would be a more than comfortable amount to have a brilliant Christmas with family and friends – and have a little left over.

A guarantor loan is for life, not just for Christmas. Yes, there are so many things you could use your guarantor loan for! A guarantor loan is a personal loan, meaning you can use it for pretty much anything. Many people use the loan to consolidate other outstanding debt, paying off credit card bills, for car finance or even to fund a dream wedding. A guarantor loan can be used for almost anything – as long as it is legal.

Christmas may be paid for off your own back, but in January you find yourself in a tight spot, financially. A guarantor loan is there to support you when you need it most. Filling in the online application, with a guarantor at the ready, means your loan could be approved almost instantly with certain loan companies.

Quick and Stress free

Many lenders will have fast approval times for loan applications, meaning funds could be transferred into your guarantor’s account within 24 hours. No ones to blame when finances get on top of you and you find yourself in a tricky position.

A guarantor loan could remove the stressful costs of Christmas. Meaning you have more time to enjoy the festive period with friends and family. Don’t let bad credit and poor finances ruin your Christmas. No shockingly high representative APRs, just trust based lending and affordable repayments.

So, if you’re looking to borrow money for Christmas, look no further. An unsecure, guarantor loan may be the ideal way to fund your festivities – especially if you have poor credit.

Author Bio:

Hugh Sallows is a Content Marketing Executive at Revive Digital Media. Writing content for magazines, blogs and websites, Hugh has an extensive history in writing. Hugh is currently researching and writing in Finance, specifically working on guarantor loans.