If you have problems on borrowing money because of your bad credit, a guarantor may be able to help you. A guarantor loan is available to anyone even those with bad credits because this has no credit checks. As long as you have someone with you who will serve as the security for the lender against any outcome of the loan.
Your credit standing will not have an effect with this type of loan, but your guarantor’s credit standing will. They should be a homeowner with good credit status. It is very vital that the guarantor understands fully what his or her responsibilities are before submitting to be the loan guarantor. Because as the security of the loan, he or she will be responsible for the repayments in case the borrower fails to do so. A borrower can loan an amount of up to £3,000.
Typically, you will be qualified as a guarantor if you are 23-70 years old, earning £800/month, a homeowner, and you have a bank account. With a qualified guarantor loans for the unemployed, tenants, non-homeowners, individuals with bad credit history and individuals that are on benefits are possible.
Mutual Fund Loans
Mutual fund is a pool of money from many investors that can be used in investment securities – like stocks, bonds, money market, other securities and other mutual funds. Technically speaking, taking out money directly from your mutual fund is not allowed. What you can do is open a margin account with your mutual fund and there you can borrow money from a brokerage with your mutual fund account as collateral.
When it comes to rates and how much you can borrow, don’t’ strain yourself with the calculations because usually it’s the broker that does it.
Money Market Loans
These are short-term loans that usually have less than a year or up to 13 months maturity. This may not be the very best thing to do because given that the rates with money market are very variable, you may end up getting an amount less than what you really need. But this could be one source of immediate or temporary capital.
This type of loan is quite advisable because while you keep your annuities intact you get to avoid being charged with taxes if you pay what you owe on time. As the owner, you can enjoy tax-free access on the funds of your annuities through loans. You can even take out half of your annuity in a lump sum.
Interests and payments of your loan shall be reimbursed to your account so if you fail in paying it back on the deadline it will be considered a withdrawal and will be subjected to tax. In cases where you had a loan with your annuity account when you are still not 59 ½ years old, you will be charged an additional penalty for early withdrawal.