Loans: Savings and guarantors

KBX_2

Hello all,

I have a couple of questions.

1. Is it possible to get a loan that comes out of savings as opposed to your salary. E.g. - You had a salary and saved and then purposely stopped working for a set amount of time e.g. for study/travel etc, are there any loan companies that will take the payments from your savings.

2. Are there any decent loans that would accept a guarantor?

Many Thanks,

KBX

Tixy

Why not just use your savings for whatever you were planning on paying for using the loan?

Seems an odd financial decision to borrow money to be repaid slowly from savings. You savings will not be earning anywhere near as high an APR as what you would end up paying on a loan.

But basically no - any lender wants to see you have an ongoing income to use to pay back a loan. They cannot rely on you having savings, they are much too fluid an asset, you could withdraw and spend your savings at any time.

KBX_2

What I'd like to do would cost more than what I'd have in savings. However when I complete the task at hand I'd be able to resume paying off the loan.

Thank you for your response, that makes things clearer.

Tixy

In that case even more a resounding no - the lender would be taking the risk that you will be able to find employment part way through the loan repayment term.

In terms of a guarantor - its basically only high risk lenders who go down the guarantor route. If you have someone willing to guarantor a loan for you, it would be far better for them to obtain a loan in their own name at a much better APR and loan you the money personally (if they are not prepared to do that then it may be that they don't understand the implications of being a guarantor).