Top 6 Reasons People Apply for an Unsecured Personal Loan or Guarantor Loan
Every day we speak to literally hundreds of people who find themselves in the position of needing additional funds and for a wide variety of reasons.
In this article we will be looking at the most popular reasons people have applied for an unsecured personal loan or guarantor loan from George Banco to help them resolve their own specific financial needs.
Many people in this situation will have already been to the bank and been refused credit from the mainstream lenders, and in the not so distant past many were left with one remaining option of applying for a payday loan with APR’s in the thousand’s of percent or visiting unregulated money shops of some description.
Pay day loans with such a high rate of return are obviously not a long term or sustainable solution if someone is short of immediately accessible funds, especially when it comes to affordability and having the capacity to pay back the loan. The chances of being in the same financial position the following month become vastly increased, and they enter an ever decreasing financial position that can†result in bankruptcy.
Times have changed, and there are now a number of direct lenders that can give people in need access to funds without going to those extremes.
So why have people applied for an Unsecured Personal Loan or Guarantor Loan?
1. Repayment of Existing Debt
The highest proportion of applicants we speak to are all looking to pay back debt in some form or other. This may be a credit card that has accrued over time and has become unmanageable. The debt may even be a pay day loan whereby the repayments are simply too much to cope with over the time period it needs to be repaid.
Even though taking on an additional loan is in reality taking on further debt, the repayments with various unsecured personal loans are generally agreed over a longer repayment time period, so they become more manageable and more affordable.
Click here to read a recent article discussing how debt consolidation is the biggest reason for personal loan applications
2. Car Loans
This is easily the second highest reason for applications we see at George Banco. Most car loans are for second hand cars but we are starting to see more applications for lower cost brand new cars due to a drop in price over recent years.
George Banco Car Loans range from £1,000 to £7,500 and can be applied for at motor dealerships with no deposit requirements or limits to the age of the vehicle.
3. Car Repair Loans
It stands to reason that if Car Loans is the second biggest reason that people apply for an unsecured personal loan or a guarantor loan with George Banco, that in order to keep our beloved motor vehicles on the road, repairs will always be high on the financial priorities list.
The amounts of each car repair loan being applied for are generally lower but the number of applicants is quite high.
4. Home Improvement Loans
Home improvements are very close behind car repairs in our top 6 reasons list. We hear a lot about roof repairs, especially in the obvious autumn and winter months. We also hear about emergency†boiler replacements and house repairs needed†when insurance policies have accidentally lapsed and damage has occurred.
5. Holiday Loans
Year after year holidays continue to become more and more expensive, certainly in family situations. This is not only due to the cost of living in the country’s being visited, but in many cases it is the huge inflation of costs outside of school term times by the travel companies themselves. This has meant that many families cannot afford an annual holiday and have had to make compromises.
The choices are; to remain in the UK, reducing the travel costs themselves allowing more to be spent on accommodation and activities, or to still go abroad but only go every two or three years.
6. General Lifestyle Improvement Projects and Activities
This is quite a large category but we couldn’t think of another more accurate way of labelling it. Looking at some of the reasons in a little more detail; we hear from a lot of applicants looking to purchase caravans and motor homes. This could relate to the holiday loan category however this is an activity that many undertake most weekends, so it becomes more of a lifestyle choice than a one off annual or family holiday.
For others it means having the capacity to afford to achieve their dreams, whether it’s towards the cost of owning bucket list item such as owning a hot tub in the garden, or an expensive digital camera that would have taken years to save for.
There are of course thousands more reasons that people apply for an unsecured personal loan or guarantor loan, these are just a few of the popular reasons we hear about when speaking to applicants looking to take control of their personal finances.
Remember, if you are experiencing financial issues, before considering any form of additional debt, it might be worth a look at the Money Advice Service website for advice.