Everything you need to know about no guarantor loans in the UK

Regardless of your monthly earnings, you can fall short of savings when an emergency crops up. Online lenders can help you tide over if you need money urgently, but things are not as smooth as they should be in case of a poor credit rating.

Bad credit history calls your creditworthiness into question. A lender will likely assume that you do not pay off the debt on time. As there is no security that mitigates the risk of the lender, they will likely turn down your application.

However, some lenders do not mind signing off on no guarantor loans. A no guarantor loan is a type of standard cash loan that you take out during a financial emergency without the need for a guarantor and collateral.

It means that you take full responsibility for paying down the debt and any action taken against you in case of default or when you fall behind the due date.

When you take out a loan without a guarantor, you will be entirely responsible for clearing the dues – either in instalments or in a lump sum. As you cannot arrange a guarantor, a lender will get assurance about your repaying capacity through other ways. Regardless of your monthly earnings, you can fall short of savings when an emergency crops up. Online lenders can help you tide over if you need money urgently, but things are not as smooth as they should be in case of a poor credit rating.

Bad credit history calls your creditworthiness into question. A lender will likely assume that you do not pay off the debt on time. As there is no security that mitigates the risk of the lender, they will likely turn down your application.

However, some lenders do not mind signing off on no guarantor loans. A no guarantor loan is a type of standard cash loan that you take out during a financial emergency without the need for a guarantor and collateral.

It means that you take full responsibility for paying down the debt and any action taken against you in case of default or when you fall behind the due date.

When you take out a loan without a guarantor, you will be entirely responsible for clearing the dues – either in instalments or in a lump sum. As you cannot arrange a guarantor, a lender will get assurance about your repaying capacity through other ways.

• The lender will look at employment stability.
• You should not have any latest defaults.
• You must not have additional outstanding debt.
• Payday loans
• Unsecured loans
• Same day loans
• Do you actually need to borrow money?
• Could you put it off?
• Will you be able to settle it on time?
• Are there alternatives you can consider?

Types of no guarantor loans

Loans without guarantor can come in various forms. It is not a specific type of a financial product. it is rather a category that covers several types of loans:

These loans can help you tide over during the next payday. Since you need funds for extremely urgent reasons, no such obligation is required. A few lenders do not provide these loans because they promote only instalment loans.

Unsecured loans from direct lenders are also known as no guarantor loans. You do not need to arrange a guarantor and collateral, which means you have complete responsibility for paying off the loan.

Loans without guarantors are also marketed as same day loans. If you need money urgently and the borrowing amount is not large enough, you can apply for the same day loans. The lender will quickly look over your credit profile to make a decision the same day.

What if you fail to qualify for loans without a guarantor?

Although there are a couple of lenders that lets you borrow money despite a poor credit rating, there are chances that they may not approve your application.

A poor credit score range is between 561 and 720. Though a lender can consider bad credit history, you will unlikely qualify when your core is 561. It depends on the policy of a lender. It is imperative to meet the eligibility criteria they have set for it.

If you cannot get approval for loans without a guarantor, you should seek to apply for bad credit loans. These loans exclusively aim at helping borrowers with a less-than-stellar credit file.

These are also known as unsecured personal loans for bad credit. They will let you borrow a large amount of money to be paid down in fixed monthly instalments.

When does it make sense to use no guarantor loans?

Loans without a guarantor can be used for various reasons, but experts suggest that you use these loans for meeting unexpected and emergency expenses. For instance, you need an immediate cash injection to have your car repaired.

These loans are ideal for one-off funding costs. It is not a wise attempt to use these funds to meet recurring costs. Even if you need money, you should not make an impetuous move. Analyse your financial situation, so you do not face any difficulties at the time of paying off the debt. Ask yourself the following questions:

When are Loans without guarantors unsuitable?

A no guarantor loan can be used for funding financial emergencies, but it also depends on the nature of the loan you are applying for. For instance, both payday loans and unsecured loans do not require a guarantor, but the former will fund only small needs to be paid off on the next payday.

No matter what kind of no guarantor loans you are taking out, it is strictly recommended that you not use them as a supplement for your current income or make frivolous purchases. Use these funds only when there are financial emergencies only.

Are no guarantor loans available with a soft credit check?

Loans without a guarantor are not available without going a full credit check. If you are looking to borrow money without having a hard credit check, you can only apply for a payday loan. These loans require only soft credit inquiries that no other lenders can see. This is also one of the reasons why payday loans are more expensive than other loans.

You may fear hard search footprints, but you will likely avail yourself of lower interest rates. A credit search gives an idea to a lender of your repaying capacity. This helps make a better decision about the lending amount and interest rates, so you do not fall into a debt spiral.

Description: Are you looking to apply for no guarantor loans? This blog discusses these loans in detail.