Taking on a guarantor loan is not something that should be entered into lightly, but it should also not be a huge effort to pay every month either. If your guarantor loan payments are constantly on your mind and you worry about meeting them in full each month, then you may have bitten off more than you can chew. This is not the intention of a guarantor loan; they’re meant to be a fairer and more manageable form of borrowing compared to other credit products aimed at those with a poor or non-existent credit history.
Failing to make a guarantor loan payment means that your guarantor is likely to be asked to step in and make the payment on your behalf. This is what they signed up for when the loan was taken out, and they will be bound by contract to honour this. Of course, no guarantor is happy when they’re asked to make a payment, particularly when it comes out of the blue, so it’s important that you stay in contact with your guarantor and keep them in the loop as much as possible.
One of the surer ways to keep abreast of your payments is to plan well ahead. ‘Failing to plan is planning to fail’, so the saying goes. Knowing exactly what needs to go in and out of your account in any given month is an essential part of managing a budget. Working this out for your own expenses and income can help hugely when it comes to understanding what you’re able to pay.
It’s likely that an advisor would have gone through your income and expenditure with you when you applied for the loan, so using this information and looking at your usual outgoings, you could try to work out just where you’re spending the most each month. Looking ahead at your potential earnings and the essential things that you need to pay for (accommodation costs, council tax, food, utilities etc.) should give you a good idea about how much you have left for other things. Always count your debt payments in with your essential expenses, as not paying them could have consequences which far outweigh the results of you not being able to go on holiday or afford that night out with friends. A missed credit payment could affect your credit file for up to 6 years, making it hard for you to get credit elsewhere in the future.
If you have a variable income, then it could be worth setting aside an extra month’s worth of loan payments when you've had a good income month, just in case you’re unable to meet your payment commitments at some point in the future. This will not only give you peace of mind, but also will act as added protection for your guarantor, who will have to foot the bill if you ever fail to make a payment. This could put strain on your relationship and prevent them from helping you out in the future.
Failing to make a guarantor loan payment means that your guarantor is likely to be asked to step in and make the payment on your behalf. This is what they signed up for when the loan was taken out, and they will be bound by contract to honour this. Of course, no guarantor is happy when they’re asked to make a payment, particularly when it comes out of the blue, so it’s important that you stay in contact with your guarantor and keep them in the loop as much as possible.
One of the surer ways to keep abreast of your payments is to plan well ahead. ‘Failing to plan is planning to fail’, so the saying goes. Knowing exactly what needs to go in and out of your account in any given month is an essential part of managing a budget. Working this out for your own expenses and income can help hugely when it comes to understanding what you’re able to pay.
It’s likely that an advisor would have gone through your income and expenditure with you when you applied for the loan, so using this information and looking at your usual outgoings, you could try to work out just where you’re spending the most each month. Looking ahead at your potential earnings and the essential things that you need to pay for (accommodation costs, council tax, food, utilities etc.) should give you a good idea about how much you have left for other things. Always count your debt payments in with your essential expenses, as not paying them could have consequences which far outweigh the results of you not being able to go on holiday or afford that night out with friends. A missed credit payment could affect your credit file for up to 6 years, making it hard for you to get credit elsewhere in the future.
If you have a variable income, then it could be worth setting aside an extra month’s worth of loan payments when you've had a good income month, just in case you’re unable to meet your payment commitments at some point in the future. This will not only give you peace of mind, but also will act as added protection for your guarantor, who will have to foot the bill if you ever fail to make a payment. This could put strain on your relationship and prevent them from helping you out in the future.