We may have heard a lot about good and bad debt or perhaps only a little bit. If we are aware of what it is, we may wonder whether no credit check loans are considered to be good or bad debt. It is worth refreshing your knowledge about good and bad debt and then you can decide whether these loans are a good idea.
What is Good and Bad debt?
There are a few main things which will make the difference between something being a good or bad debt.
What you use it for – if you borrow money to buy luxury items then this would be considered to be bad debt. This is because if you can wait for the item and save up then this will be a lot cheaper for you. Therefore, it is normally considered good debt if you are buying a necessity with the money. However, there is an exception to this when you are buying something will improve your finances in the future. This would be something like buying a home which will mean that you will not have to pay rent anymore and so will have a cheaper time in the future, once the mortgage is paid off.
Checking you can repay it – if you take on debt that you cannot repay, whatever the purpose, then this will be considered to be bad debt. It is always worth checking how much you will be expected to repay and when, so that you know whether this is something that you will be able to cope with. You need carefully examine your own finances to make sure that you know what is going on. Think about how much you are paid and when, what things you have to pay for and whether you will have enough left for the loan repayments.
It is also important to check that the loan that you have taken out is the right one for the purpose that you are using it for. Make sure that you think about your requirements for a loan and that the one that you choose fits it really well. You also need to think about the different lenders that offer that type of loan and compare them so that you can be sure that you have got the loan that will offer you the best value for money.
Are no Credit Check Loans Good or Bad Debt?
So whether a no credit check loan is good or bad debt will very much depend on the situation that it is taken out under. For example, you need to think about why you are taking it out and whether this is either for an emergency or a situation that will end up with you having improved finances in the future. It is also important to make sure that you will be able to repay the loan and therefore you need to make sure that you are able to do this taking into account your current financial situation. You will also need to make sure that you have considered all loan types and checked that this is the best one for your needs and that you have picked the lender which will offer you the best value for money. Of course, this does sound really simple and it will take some time to do all of this investigation. It is not that that easy to always decide whether you are borrowing the money for a good purpose or whether you have compared every single lender etc. However, if you can give it a good go then you will know that you have done the best that you could.
If you need money quickly then you might be tempted to head towards no credit check loans This could be a sensible idea as they do tend to be fast to organise. You might be wanting to find the one that is the fastest so that you can get your money as soon as possible. There are some that are quicker than others so you might want to look for the one that will be the fastest.
Different Loan Types Have Different Speeds
There are different types of no credit check loans and they will have different timescales with regards to how long it will take for you to get the money. For example, you will find that a payday loan can be organised very quickly, but if you pick a guarantor loan, a credit check will need to be done and you and the guarantor will need to sort out paperwork so it could take longer to organise.
Different Lenders Have Different Speeds
You will also find that the lenders will vary in the speed that they operate. For example, some lenders may take a few days but others will take a few hours. This can make a huge difference and so it is wise to check how long the one you are considering will take. It is also a good idea to note that some lenders will operate outside of normal banking hours and you will be able to use them at weekends or overnight. This could make a big difference if it is at these times when you need money. So, this could also be something that you will need to check out when you are picking a lender.
Ensure you do not Slow Things Down
It is also a good idea to make sure that you do not slow things down. You need to make sure that when you have decided which lender to use, that you will apply carefully. You need to make sure that you complete the application form fully and correctly and send any documents that are required really quickly as well. This means that you will not hold things up – which would be annoying if you are trying hard to get the money as quickly as possible.
It is really important to be careful about rushing things though. Obviously, you must be in a situation where you need some money fast, but if you are rushing your decision then you may not make a very good one. It is important to try to think clearly about what you are doing. Make sure that a loan is the right option and that there are no other better alternatives. Then check the different loan types and think about which will be the best one for you. Then think about the lenders and compare them. There may be quite a few that will offer a fast service and if this is the case then you should compare them to see which will offer you the best value for money. You will find that there are quite a few differences between them and you want to make sure that you are not paying more than necessary and that you are getting a good service for what you are paying. It might take a bit of time to do these comparisons but it could make a massive difference. It will mean that you will be able to have a much better borrowing experience just by spending a little bit of extra time looking into what you are doing. It is good to make sure that you spend at least a little bit of time doing this.
If you have decided to get out a guarantor loan, then you will need to find a suitable person to be your guarantor. This can be tricky as they need to fit certain criteria :
Good credit rating
It might be relatively easy for you to find someone that you know that has a good credit rating. It can be hard to tell without asking people though. You might find that it is those that you least expect that might have a poor credit rating or that people may not know what their credit rating is and so they will have to find out before you will know whether they will qualify. It is easy enough to look this up and you can do it for free but you may have to find out how to do and show them how to do it before you can find out whether they will qualify.
Willing to make loan payments if you miss them
Finding someone willing to help you out might be tricky but it depends on the people that you know. You might find that your parents or grandparents will be willing to help you, particularly if they have helped you out financially before. It might be harder to convince friends to do this for you but it is normally someone that you love that will most willing to help you out. Of course, they may also want you to repay them once they make that repayment for you. It is important that you find out whether this is the case or not. Some people will be happy just to pay it for you and help you out in your time of need. However, others might be more likely to want you to repay the money. They may want you to repay it as soon as you can or feel that you should wait until you have enough money to do so. Some might say you can wait until the loan is repaid. It is a good idea to find out what they feel and come to some sort of agreement with regards to repayments before they sign up for the loan.
Have enough money to make those payments
It is also important to make sure that they have enough money to make the repayments. You might think that is their concern, but you should make it your responsibility. This is because if they run short of money, they could end up blaming you. You could also feel bad if you know that they are short of money because they have been having to make your loan repayments. Therefore, it is a good idea to have a chat with them about this. It can feel a bit personal, but you are asking them to help you out financially so you have told them about your financial situation so it should therefore be okay for them to let you know about theirs. It is wise to check with them whether they would be able to manage if you missed any repayments or all of them. It is good for them to assume they will have to pay it all and work out how they will cope. Hopefully, they will not have to do this but if they are prepared then this will mean that they will not be in shock if it does happen. It is well worth preparing them for the worst but explaining to them that you will try your hardest to make sure that they do not have to pay anything. They might even give you some help on budgeting so that you can be in a better situation to make those repayments. It might even be worth asking them for some tips.
If you have any sort of loan, then it is really important to do everything that you can to make sure that you repay it on time. This is because you will always be charged extra money if you do not do this. Therefore, it is worth planning carefully for this to make sure that you will be ready to repay the loan. There are some steps that you can follow that will make this a lot easier.
Check How Much Needs to be Repaid and When – to start with you will need to find out how much you will be expected to repay and when. You might find that there will be a calculator on the website of the lender which will give you this information, but if you are unsure then it is best to get in touch with them and check as they will be able to confirm the actual figures. This will enable you to know what you are aiming for.
Check What You Pay for on the Day– it is also wise to then look back at your direct debits and standing orders to see whether there are any other things that you pay for on that day. It is likely that the loan repayment will be set up to take place on the day that you are paid and this means that you might have other payments going out on that day as well. It is a good idea to check this and any other payments that go out around that time so that you can check that there will still be enough money available.
Check your Income – it is also a good idea to check how much money you think that you will actually get in. Some people are always paid the same amount but for others it might differ and therefore you will need to think about this and then look to see whether you will have enough money left to pay for the loan and all of the other payments that are set to go out of the account.
Check What Else you Need to Pay for – it is also important to think about any other things that you might need. Things like food or fuel will tend to be bought through the month and you may need to buy some of these and this could mean that you will need some money for them. Check how much you are likely to spend and then you will be able to work out whether you will have enough money left.
Consider Changing Things – it is a good idea to think about whether you need to make a few lifestyle changes so that you can be sure that you will have enough money or to provide the money that you need, if you do not have enough. There are different things that you can try. For example, it might be worth starting by examining your spending. While you are trying to repay this loan it could be a good idea to consider cutting down your spending as much as possible, Not only should you try to only buy necessities but also make sure that you are not overpaying for items that you regularly buy. Compare prices on things you are buying, including things like insurance, utilities and contracts and see whether you can swap to cheaper ones so that you can save money. Some changes you make might take too long to take effect, but it can still be worth doing as it could reduce the likelihood that you will need to borrow in the future.
If you cannot reduce your spending any more, then it can be a good idea to consider whether you can earn more money. It could be possible that you can do a few more hours in your job, take on some temp work, earn some money online or even sell some things you own and do not need to raise some money. There are different things that you can try which could be really helpful to you.
As payday loans are not some of the most commonly used loans, it could mean that there are all sorts of questions that you might have about them or you might have heard rumours about them and wonder whether they are the right loans for you to use. It is a good idea to make sure that the information that you have is correct before deciding whether this sort of loan is good for you or not. So, for example, if you are wondering whether you are old enough, then you will need to know a bit more in order to answer that question.
Is There an Age Restriction?
There is an age restriction on payday loans but it is the same as all loans. This is that you need to be eighteen years old before you can borrow money. This is understandable because it means that you have to wait until you are an adult and therefore responsible enough to take out a loan and deal with it. It is also more likely that you will have a full time job and therefore have the money available to you to be able to repay the loan. However, just because there are very limited age restrictions, it does not mean that you will not need to be careful about when you take one out. Just because a loan is available to you, does not mean that you should just have one. You need to think about whether it is the right time to have one.
Am I Old Enough to Cope?
Having a loan is a big responsibility. You will be expected to repay the loan at a certain time and this means that you will need to budget your money so that you can afford to do this. You will have to think about how much you will need to repay and when you need to pay it. Then you need to work out whether you will have enough money to be able to afford to pay it and afford everything else that you need to buy. This is something which you need to carefully work out.
You will need to start by making sure that you are aware of how much you will need to repay. You do this by either using the calculator on the lenders website or contacting them. Then you will need to think about whether you will have enough money to be able to make that repayment. Consider how much you will get paid and whether that will be enough. Then make sure that you also will have enough money to pay for any other payments that will go out of your account on that day. You also need to think about things that you might need to buy later in the month, before you next get paid and make sure that you have enough money for that. It can be a good idea to make sure that you actually look back at previous bank statements to see what you have paid out over the last few months so that you can estimate what you might pay out this month. Also think about whether you are likely to have to pay more this month for any reason. It will take time to look into all of this but it is worth it because it means that you will be able to be confident that you are in a position to repay the loan.
Am I Too Old?
There is no age limit, but you will need an income to get a payday loan. This could be a pension though. You will need to be cautious though and do the same sorts of checks as are mentioned above to make sure that this will be something that you will be able to afford.
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