How to Get a Loan after Declaring Bankruptcy
At some point or another in our lives we all find ourselves in a financially tight spot. To pay the bills and to see ourselves through this difficult time, we try and get a loan from a bank or a loan company. Generally, you fill in the forms, get a credit rating check performed on you and then the money is put into your account. Simple.
However, when you have declared bankruptcy and find yourself in need of a loan, you may find doors being closed on you, especially if you have no form of collateral. But do not despair; there are ways to get a loan if you have been declared bankrupt.
Guarantor Loans:
A guarantor loan, or co-signer loan, is a loan where another person takes responsibility for you should you not be able to make your payments. The loan remains in your name and you make the payments each month. However, if for any reason you are not able to make a loan payment, then the company turns to your guarantor for payment.
If a close family member or friend is willing to help you, you should first make sure what both parties’ responsibilities are before signing on the bottom line. Each company has different rules and standards which both applicant and guarantor will need to meet.
Once you have someone happy to co-sign a loan for you, the process is very simple. First, a credit check is run on both parties’ before taking some financial details. These are generally along the lines of where you work, how much you earn, how much can you afford to pay back each month, etc.
Remember, a guarantor is not something to be taken lightly. Many companies stipulate that a guarantor own their own home, so if you default on your payments, you are putting their credit rating and even their home at risk.
Payday Loans:
Payday loans are another way to get a loan if you have been declared bankrupt. Payday loans are loans where a company will advance you a small amount of money, generally from around £200 to £1000 at a time. You pay the loan back in full the day you get paid.
Payday loans are a short term help for when money is in short supply. Companies generally add on a sizeable amount on interest to be paid on the day of the loan.
Getting a payday loan is very easy. You don’t even need to sign a form. You ring the company, they take down some details and advise you of the terms and conditions. The money is then placed into your bank account within 24 hours.
Payday loans are paid back on a set day; if you find yourself unable to pay it back in full, you must ring the company. Explain the details and you can arrange to pay it back in instalments. They will add on a fee for this and your credit rating could go down.
Declaring bankruptcy is never an easy decision to make; it can affect your credit rating and your future financial life to come. However, when the times are really bad and you need a loan to get you through, then you can get a loan even though you have been declared bankrupt.