Sometimes we find ourselves in a situation where we might need to apply for a loan. Oftentimes, this situation becomes incredibly urgent and we need money right away.
This is when we might turn our head to a same day loan. Same day loans can be incredibly useful if you need money for an emergency situation or an urgent bill.
However, not everyone can be accepted for a same day loan.
So, if you think you might not be accepted, you’ll likely be looking for easier options, and one of those could be a guarantor – but can this make it easier?
The short answer is mostly yes, however there are times when you will not be approved for a same day loan anyway. There’s actually a lot we need to look at here.
We decided to clear up some of the confusion, so we wrote this handy guide which should answer everything you need to know about same day loans with a guarantor.
Ready to know more? Read on and learn with us.
What Exactly Is A Same Day Loan?
Same day loans are a type of loan which you apply for and receive on the same day as the application.
There are many lenders that offer this type of loan, but due to their convenient nature – you’ll likely find that the interest rate repayable is very high.
Same day loans can be very helpful for people who have an urgent need for cash and do not have the financial reserves available to them.
This could be something like an urgent car repair, boiler repair or something like a dental bill.
Whatever the reason, same day loans allow people to get money on that day without having to wait around – particularly important if you have to pay for something right now!
There are lots of reasons why people might turn their attention to same day loans. They include the following:
Many loans can take days or even weeks to be processed and approved.
With same day loans, you apply for the money that you need and if it all goes well – you will have that money into your bank account within minutes, although it could take a few hours.
This is one of the biggest selling points for this type of loan, so many people will forego the interest rates in order to have their money on the day.
One of the best things about same day loans is the fact that the application process is generally very quick.
You can fill out a loan application like this in minutes – and if you go through your credit report marketplace, most of the questions will be automatically filled.
These types of loans you will find, are available with so many lenders on the market. This is perhaps one of the best things about them because it gives you a lot of freedom to shop around for the best interest rates.
Of course though, sometimes you do not have the best credit to be able to have the edge over the lenders. So, you might need a guarantor.
What Is A Guarantor?
A guarantor is a person that you add onto your credit application. Guarantors agree to cover the payments in the event that you, as the borrower, do not or cannot pay the money outstanding.
Guarantors generally have to be homeowners to be able to guarantee a loan, and normally guarantors have to have a great credit rating.
In fact, some lenders will base their interest rates and other fees on the guarantor’s credit rating – assuming you use one. Of course, this varies from lender to lender.
Is It Easier To Get A Same Day Loan Using A Guarantor?
Generally yes. This is because the risk to the lender is significantly reduced.
Normally, people use guarantors if they have poor or no credit history and therefore, lenders consider them a risk to lend to.
Using a guarantor (which normally has a good credit rating), lenders are more reassured that they are able to recover their loan amount – and therefore, they are far more likely to lend to you.
Will The Application Take Longer With A Guarantor?
It’s difficult to say because this will vary from lender to lender application processes. However, typically you could say yes – the application would take longer.
The reason for this is because your guarantor would need to provide their credit information, financial information and potentially identification and proof of home ownership.
This does not mean that you won’t receive your money on the same day with a same day loan – but it does mean that the time the application takes to complete can be longer than usual.
What Happens If I Default And I’ve Used A Guarantor?
Defaulting on any credit agreement is going to have huge consequences on your credit report and you will likely find it difficult to obtain credit in the future.
Not only this, but you will probably find yourself in severe financial difficulty.
However, the most problematic thing about defaulting when you are using a guarantor is that the guarantor will be contacted and sought after for the debt.
Guarantors typically tend to be family members or very close friends, due to the risk they take in applying their names to loan agreements.
As a result, defaulting on this type of credit agreement can lead to a relationship breakdown.
Your guarantor can find themselves in personal financial difficulties if they are now being sought after for the debt, and they could potentially lose their home – depending on the terms of the loan agreement.
As a result, you need to think very carefully about using a guarantor if you have a poor history of money management. This is especially true if you do not have a stable income.
What Can I Do Instead?
If you do not want to use a guarantor or cannot find a guarantor, then you could try to apply for a same day loan on your own.
However, the likelihood of acceptance for a same day loan will largely depend on your credit score.
If you have a poor credit score and generally a poor credit history, you could find it very difficult to find a lender to approve you for this type of loan.
It’s also important to note here that you should not apply for multiple loans in a short period of time.
This is because too many hard checks on your credit report can affect your credit score and be a negative indicator of your creditworthiness to lenders.
Depending on why you need the money, you could consider the following other options:
- UK Government assistance
- Friends or family lends you the money
- Same day car finance
- Bank overdraft facilities
Typically, using a guarantor will make it easier to get a same day loan – but it doesn’t always mean you will be accepted.