Having someone to support with payments is not feasible for an individual. It could be because you want to keep your finances a secret affair. Alternatively, you don’t want to bother your loved ones with minimal cash needs. A no-guarantor loan may prove the best option here. It helps you meet cash needs without depending on someone to make the payments.

It eases up the deal as you are solely responsible for the payments. However, most individualspanic at the basic thought of managing loan payments all alone. So, if you can relate, you are not alone. The blog states how to overcome this fear and manage loan payments without worries.

Who is a no-guarantor loan ideal for?

A no-guarantor loan is ideal for someone who does not want to include a third person on the loan.  It helps one manage the loan payments without disclosing the needs or financials to someone else. One can tap these loans to meet any emergency or short-term money needs for up to £10000. You may qualify if you have a consistent income, low debts, and a well-managed credit profile. Individuals with fair credit history can fetch better interest rates.  You must reveal authentic income and identity proof to qualify for the loan.

6 Steps to Repay a no-guarantor Loan confidently

A no-guarantor loan is the best way to counter the cash needs independently. However, it involves competitive interest rates due to the ease of accessibility. It does not involve collateral and hence is easier to qualify. Missing a payment may make you pay significantly more.

Skipping a repayment means paying up to £25 more on the next payment.  It may hamper your financial management eventually. Thus, analyse your loan arrangement and develop a plan to repay the dues timely. The following expert tips may help you repay the dues timely:

1) Step 1- Understand what you owe

It is the first step to beginning the loan payments. Understand how much you need to pay monthly and by the end of the loan term. Analysing the monthly payments and total loan repayment amount helps you budget accordingly.

Check for additional or hidden costs before taking  loans with no guarantor needed  for bad credit scores. You may have bad credit if you lack sufficient credit history or pending debts. Ideally, you must check for it before consenting to the agreement. It may increase the loan costs immediately. Moreover, missing payments on poor credit history may further affect your credit rating. Always ensure a well-researched and educated loan.

2) Step 2-  Know your loan instalment dates

After knowing the monthly amount and the total dues to pay, check the dates. Analyse the repayment structure. Check whether you must pay the dues monthly, fortnightly, or weekly instalments. You may get such options to manage the payments according to your comfort.

Making monthly payments is usually more comfortable than weekly ones. Alternatively, you pay less every week than you pay monthly. Check whether the loan repayment date is near the salary day. You should try to choose the date strategically to avoid missing the payment.

3) Step 3- Make changes to your budget

What do you do when you want to buy something the next month? You try to cut back on the non-essentials to save money for that thing. You must repeat that exercise here as well.  Put the total amount you spend on needs and wants against the monthly payment. List out and separate the wants from the needs.

It will help you give the list of essential and non-essential expenses. Also, put things like- car servicing, and renovation at a halt until the loan repayment. It is especially true if these things are in stable condition.  Eliminating discretionary expenses will help you save evenly for the loan payments.

4) Step 4- Review the changes in your income

After adjusting the budget, check your income. Is your income stable enough to manage the loan repayments? Yes, you may get the loan on a part-time income as well. Thus, it is important to understand your income prospects in order to pay off the loan. Individuals with seasonal and inconsistent ones stand a chance to miss a payment or two.  It is not good for your finances and future perspective. Thus, analyse the best ways to increase the basic income.

It is important, especially if you live from paycheck to paycheck. You must have some additional financial flexibility to avoid skipping the payment. Alternatively, individuals with an income drop must check other employment options. Defaulting on a no-guarantor loan can lead to severe consequences. You can eliminate the troubles only by ensuring sufficient cash backup.

5) Step 5- Set direct debits for payments

Individuals with consistent and regular income streams may benefit from this. You may even benefit from the loan provider’s assistance if you apply for payments via direct debits. It is an automatic payment module where the creditor receives the payment on the due date with an automatic cash deposit. You do not need to go personally to pay the dues or set reminder schedules.

It is important, especially if you are making the repayments all alone. It reduces the worries of missing a payment due to slight negligence.

Direct debits reduce the chances of loan default by 98%. However, you must hold sufficient cash amount for the process to work. Don’t use the funds if you encounter any emergency. It may affect the payment then. Instead, you may get small loans in 15 minutes with no credit check option. It is the best way to counter any small need without affecting the repayment of no-guarantor loans. Besides that, these small personal loans leave no credit screening imprint. You can repay this according to your capacity and comfort. In case of difficulty, you share the flexibility to re-schedule the payments.

6) Step 6 – Reach out if you cannot pay

Lastly, if you encounter any difficulty in repaying the dues, contact the provider. Do not wait until the next payment date. It may prove cumbersome for you if you don’t act now. The loan provider may provide a viable solution after analysing your situation. It prevents you from skipping the payment or defaulting on a loan. You may get the option to halt the payments, make interest-only payments or re-schedule the agreement. It is better than skipping payments and affecting credit scores.

Bottom line

It is natural to panic at the thought of making repayments alone. However, updating your financial knowledge and knowing your liabilities help. It encourages you to reduce or eliminate the unnecessary expense and focus on the repayments. Thus, you never spend on something that may hamper your repayments. Additionally, monitor your income progress and keep your financial habits in check. It prevents you from encountering an unpleasing financial downfall.