If you are considering applying for loans without guarantor, you might be wondering what your options are. Guarantor loans do have their place, more so if your credit rating is not up to par, but they do come with many downsides too.
One of the biggest downsides to a guarantor loan is that you have to involve a third party. The third party has to be someone close to you but cannot be a spouse or partner. Usually, it is a good friend or other relatives. This can put a strain on friendship and more so if you find you cannot make the loan repayments, as they would then fall onto the person who stood as guarantor.
Thankfully, numerous loan choices do not require you to ask someone to stand as guarantor. Here we are going to look at those choices and the best way to find a loan.
We Can Match You with a Lender
Wouldn’t it be nice if someone could do all the hard work for you and search for a loan on your behalf with a panel of ethical lenders in the UK?
To search with lenders who offer:
- Affordable loans;
- Numerous loan options;
- Competitive rates of interest;
- A decision within minutes;
- A wide range of loans that don’t need a guarantor;
- Fast payouts if approved.
Well you can, if you apply for your loan with our help. Bonsai Finance is not a lender. Instead, we work alongside a panel of lenders in the UK to bridge the gap between people looking for a loan and lenders.
By applying for your loan with our help, you can save a great deal of time and stress, as within minutes you will know if we can match you with a lender. What’s more, you get access to a panel of lenders all from one single loan application. This means there is not going to be numerous applications noted on your credit file, all of which can go against you.
Are You Eligible for a Loan?
You can save yourself some time by making sure that you are eligible for a loan in the UK. All UK lenders will want to ensure that:
- You are over the age of 18;
- You live in the United Kingdom;
- You have a regular income from work or benefits;
- You have a bank account in your name;
- You have a debit card attached to the bank account;
- A direct debit can be set up on the bank account.
A regular income means money that is paid into your bank account on a regular basis, such as every month. This also applies to some types of benefits; it does not have to be money earned from work.
The lender needs to know your bank and debit card details, as this is how they will pay the funds from the loan and retrieve the money you owe on the date or dates the repayment is due. This means your bank account should support direct debit payments.
If you can answer yes to the above you meet the eligibility requirements to be able to apply for a loan.
A Range of Loans without Guarantor
There are many types of loans available with loans being suitable for all needs and credit ratings. It goes without saying that the better your credit rating, the lower the rate of interest will be, as lenders have to determine how big a risk you are.
Your credit rating is also going to determine the type of loan that might be more suitable. Payday and short term loans are usually easier to be approved for with a poor credit rating than personal loans.
Now all that’s left for you to do is decide which loan might be the most suitable for your need.
When looking for no guarantor loans the most popular types of loans are:
Which loan will be the most suitable is going to depend largely on the amount of money that you want to borrow and how long you want to spread the repayments of the loan over.
Most Suitable Loans for Short term Borrowing
The payday and short-term loan are the most suitable types of loan for short-term borrowing when you do not want a huge sum of money.
Both of these loans are also excellent choices if you know you can repay the loan back quickly. They are also both types of loan that are easier to get approval for if you have a poor credit rating.
A Payday Loan
A payday loan is a loan that typically offers between £100 and £500. When the loans first arrived on the market, they were repaid on the next payday in full. This meant that the loan was taken out for just one month. Today loans of this nature can be spread out for up to three paydays, which is the equivalent of a three-month loan.
By spreading out the loan over three paydays it might make the loan more affordable each month, however, in the end it means that you will be paying more in interest on the loan, so borrowing is going to cost you more.
The APR on payday loans is usually shown as thousands of percent APR, but bear in mind that you will not be repaying over the year, just a month or so.
Interest will be added onto the loan daily, not yearly, so you will know how much the loan is going to cost you in total before committing yourself. The lender will tell you how much they will take from your pay on the date you are paid. It is important to be able to pay off the loan on the agreed dates; otherwise borrowing this way can be costly.
A payday loan is most commonly applied for to meet unexpected financial emergencies such as:
- Paying off an unexpected bill or one that you had forgotten about;
- Paying off an unexpected unauthorised overdraft you found yourself in;
- Paying for repairs to your vehicle after a sudden breakdown;
- To pay for repairs to an household appliance you cannot manage without;
- Paying for repairs for such as water leaks or boiler breakage.
A payday loan can help in any of the above situations providing you know that you can repay the loan on the dates agreed.
The payday loan is one of the easiest types of loans without guarantor to find approval for if your credit rating is poor. This is down to the fact that you are only borrowing a small sum of money and you will be paying it back quickly.
Lenders will look at your credit file, as they have to in the UK, however, they will not look too deeply into it and they will also consider affordability and your current circumstances.
Short term Loan
A short-term loan also offers a small sum of money, generally between £500 and £1,000. Loan repayments can usually be spread out for a period of up to 12 months.
The amount of interest payable will depend on the APR so if you can, compare the lowest rate. Also, take into account any fees that might be added to the loan.
Short-term loans can be taken out for any reason, as lenders do not usually ask why you need the money.
Bear in mind, that the longer you take the loan over the lower the monthly repayments will be but the more the loan is going to cost you in total. Therefore, you will have to find a fine line between affordable monthly repayments and not paying over the odds for interest.
When considering a short-term loan always check the details of the loan so you know exactly how much the loan will cost in total. Also, double check that the monthly repayments of the loan are going to be affordable over the term of the loan.
Another consideration when applying for a loan of this nature and this also applies to a personal loan is whether there is an early repayment fee attached. An early repayment fee means that if you suddenly find yourself in a position to repay the whole loan early you might have to pay a fee to do so. By having to pay this fee, repaying early might not be worth it. However, if there is no fee and you can repay the loan before the end of the term you could save yourself interest.
Longer Term Borrowing
If you want to borrow a larger sum of money you might have to consider a personal loan or a secured loan, depending on your credit rating.
A Personal Loan
A personal loan is needed if you want to borrow up to £15,000 and spread the repayments out for up to 36 months.
However, as you are asking to borrow such a large sum of money the lender is going to consider how big a risk you are so they will pay more attention to your credit file than if you were only asking to borrow a small sum and pay it back within a month.
The amount of interest or APR you will be offered on a personal loan will depend on your credit rating. If you have a perfect credit score you should be offered the lowest rates and vice versa.
A Secured Loan
If your credit rating is particularly poor and you want to borrow a large sum of money you might have to consider a secured loan. This type of loan is not without risk. As the lender will want you to put something of value up against the amount borrowed.
If you fail to make the repayments, they can take you to court to take possession of whatever you secured, usually a vehicle or your home. With this in mind, you should always give a secured loan a great deal of thought.
Applying for a Loan
We have made it extremely easy to apply for a loan as all you have to do is:
- Tell us the amount of money you want to borrow;
- Tell us how long you need to borrow the money;
- Give us a few personal details;
- We search with a panel of UK lenders;
- You get a decision within minutes;
- If we match you with a lender you can check out the details of the loan;
- If happy you can go ahead and sign up for the loan with the lender;
- Money is paid into your bank account.
Finding the perfect loan for your needs can be difficult if you choose to go it alone and search online. There are many false promises made online just to get your attention and get you to visit websites. There is no such thing as a guaranteed loan. No ethical lender is going to guarantee you a loan without getting some details about you and your background. You simply cannot get a loan without a credit check. However, if you are only applying for a small sum of money with a payday loan the lenders we work with do not look too deeply into your credit file.
Applying for loans without guarantor with our help is the fastest and easiest way to find the perfect loan for your needs. Whether you need to borrow £100 to tide you over until your next payday or you need a substantially larger sum of money, we have lenders who offer the most competitive rates.