Guarantor Loans - Borrower Experience Required

sparkovic

I am looking for some advice from anyone with borrowing experience with E-money Union / George Banco.


I have a poor credit rating due to historic mis-spending and current short term loans. I have now admitted to myself that gambling is the real cause of my financial issues for the first time, contacted GamCare + self excluded myself from all online gambling sites and genuinely feel I have the resolve to stop gambling. I realise this this may be a long term battle but I want to take control of my situation again.


I realise that a consolidation loan (especially with a guarantor) would definitely not be the default answer for most in my situation but I feel the responsibility of not letting my friend down would make me determined not to default on the loan which would only happen if I go back to gambling.


My intention would be to borrow £4,000 over 2 years which I would have to pay back roughly £250 / mth. My intention would also be to pay £250 / mth to my guarantor to hold for me to prove my commitment and build up a pot for emergencies. If this is not required after the 1st year it would then be used to pay off the loan a year early.


From a budgeting perspective this is all achievable and I realise this may not be the most cost effective method but in this instance my main aim to regain control of my life and also ensure my guarantor does not have any unnecessary worry.


I would appreciate if anyone with any borrowing experience would be able to advice on the loan process and any issues I should look out for in the application and experience of their loan.


Apologies I know my post lacks a lot of detail but I was looking for a specific answer on the guarantor loan experience rather than personal judgements on myself if possible. I can only offer my resolve and sincerity to my guarantor and I will be explaining the worst case scenario's while trying to eleviate as many potential worries as possible.

Caz3121

From your figures that is an interest rate of over 40% which is not unusual for a guarantor loan
Given that the person signing as the guarantor would end up responsible for payments should you default. It would make more sense for them to take the loan in their name and you pay them...for the same payments you could have it paid of in 18 months or less.
If they are not prepared to take the loan in their name, are you sure they fully understand what being a guarantor means

Pixie5740

Well done for facing up to your gambling problem. I hope you have sought and found the help and support you need to continue your recovery.

Now for your financial plan. It's horrific.

1) Consolidation is rarely the answer.

2) Guarantor loans have horrendous interest rates.

3) Borrowing money to have as an emergency fund makes no sense. Save a little money each month towards your emergency fund instead.

4) Anyone who agrees to be a guarantor for a gambler would need rocks in their head.

A better course of action would be to put together a statement of affairs and learning how to budget properly. If you find that you have more going out than coming in talk to one of the debt charities (CAP UK, National Debtline or Step Change). There will be a debt solution for you.

Do not borrow more money and do not drag some poor sucker into your financial affairs.

Herzlos

What interest rates are your existing debts at? Are they going to be worse than your guarantor loan?

sparkovic

Thank you to the 3 posters above for taking the time to respond. The advice is generic and consistent with other guarantor loan threads on the forum.


However I am trying to get some more information on the solution that I feel would be best for me in the short and long term. My debt repayments are up to date as per this month but I won't be able to make a loan payment due this coming Friday for £300.


If it is possible to obtain the loan, my intention is to pay the full £4,000 that day to clear all my creditors debt to zero. I would contact all these creditors to inform them that my loans had been used for gambling purposes which should minimise my chances of using these services again. The purpose of giving my guarantor £250 / mth is to ensure that they know the debt is being re-paid (I'm unlikely to default on the loan but pay £250 to them instead) + also to ensure that if for any reason that I do default they would already have the money to make the payment. I realise this may not be the most cost effective method but I am more concerned with there not being any impact on the person showing me a bit of support in regaining control. I realise I will be a stranger to all on the forum but I think it will mean more to me to not let my guarantor down than to default or come to a payment arrangement with commercial companies.


I am hoping there may be someone who has actually used one of these guarantor loans successfully who maybe able to offer some guidance / advice.

SeduLOUs

I think you're missing the point.

If someone trusts you enough and has a decent enough credit rating to guarantee your loan, then they could get a loan in their name and hand the money over to you for significantly cheaper.

Also, they wouldn't need to wonder whether you are keeping up with repayments as they would be making the repayments themselves with you simply paying them back.

If your potential guarantor doesn't like the idea of taking a loan out in their own name, then they probably do not understand what being a guarantor really means.

sparkovic

Sorry but my point is I don't want any impact on the guarantor at all - if they take out a loan it will show on their credit file and I know they may be looking to re-mortgage in the next few months.


E-money Union only do a soft credit search on the guarantor but it is info / advice like this I am looking for. I will be making them fully aware of their responsibilities re. the loan.

Marktheshark

SeduLOUs wrote: »

If your potential guarantor doesn't like the idea of taking a loan out in their own name, then they probably do not understand what being a guarantor really means.

Has to be one of the most well written summing up statements on guarantor loans on MSE this year.

DCFC79

Have you worked it out if you can afford to use £250 a month of your monthly salary plus the other 250 you want to pay to your guarantor as a form of commitment.

So that's 500 a month, would it not leave you short eg other bills, utilities ?

Well done for wanting to sort it out.

sparkovic

Yes thanks DCFC79 - between rolling over these loans / gambling I am not proud to admit but I have been "wasting" anything from £800 / £1,000 per month.

somethingcorporate

Throw this spare cash at your existing debts. Consolidation and dragging someone else into the mire as a guarantor is cruel.