The question we are aiming to answer here is can I find loans for bad credit no guarantor UK? There are many types of loans on the market. However, if your credit rating is less than perfect you might be limited as to the type you can find approval for. One of the loans that people tend to find easier to find approval for is the guarantor loan. While this loan may suit some people, many others do not want to have to ask a guarantor to stand by their side. In this instance, they will want to know what other options are open to them so let us look.
The Types of Loans Are Out There
While there are many loans out there, we are not going to look too deeply into some of them, as not all of them are suitable for people with poor credit ratings. The loans we are going to focus on include:
- Payday loans;
- Short-term loans.
Loans that we are not going to look too deeply into but will mention are:
- Personal loans;
- Secured loans.
With all loans, some criteria needs meeting. You need to ensure you:
- Are over the age of 18;
- Have a regular income;
- Live in the UK;
- Have a UK bank account;
- A debit card attached to the bank account.
We will start with personal loans and secured loans and briefly tell you why they might not be a good option for someone with a poor credit rating.
Personal loans generally offer up to £5,000 with the repayments of the loan spread out for up to 36 months. The reason we are not looking too deeply into this type of loan is that it can be difficult to find approval for if your credit rating is poor. Even if you find approval, the APR can be higher than advertised.
Secured loans are a loan that might offer up to £5,000 but with this type of loan, the borrower has to secure something against the loan. Usually, this is something of value, such as your property or vehicle. If you fail to repay the loan, you stand to lose whatever you put up as security. Other loans do not need a guarantor or something securing against the loan. These loans are generally easier to find approval for than other loans and so we will concentrate on them.
Payday Loans for Bad Credit No Guarantor UK Might be Suitable for Your Needs
One type of loan that is usually easier to find approval for than others is the payday loan. With this type of loan, you only borrow a small sum and repay the loan within one to three months.
As the loan only involves borrowing between £100 and £500, lenders class it as a small sum of money, so they will not want to look too deeply into your credit file. You are going to be repaying it within one to three paydays or months, so the lender will not be too worried as it is not a long-term loan. Therefore the chances of getting approval are higher than if you asked to borrow a lot of money over a long period.
When applying for payday loans for bad credit no guarantor UK you have to work out whether you can afford to repay the loan in one loan sum, including any interest, on your next payday or spread it over up to three paydays.
You might want to bear in mind that the longer you spread the loan over, the more interest it will cost you and so the more you will pay for the loan in total.
Interest on payday loans is calculated on a daily basis not over the year. However, the loans are generally shown with an APR and that APR is usually extremely high. This is to reflect how much it would cost you in interest if the loan were spread out over one year. It does show that in comparison to a short-term loan, the interest rate is high. However, as you are only repaying the loan in one to three months you will not be paying the APR interest rate, only interest for the amount of time you borrow.
With this in mind you should take the loan over the shortest time possible while still making sure it is affordable and you will have enough money left after paying the loan.
Might A Short-term Loan Be More Suitable?
You might find you need to borrow more than £500. Perhaps you find yourself in a position to borrow as much as £1,000 but do not want to spread the repayments over longer than 12 months. If this is the case, a short-term loan might be more suitable for you.
You could spread the cost of the loan for up to 12 months, but again, the longer you take the loan over the more it is going to cost you in total.
Sitting down and working out how much you have left each month after paying outgoings can help you to find out how much you could afford each month in repayments. Once you know how much you can afford to repay you can then better determine how long to take the loan over.
Short-term loans fall in-between the length of a payday loan and personal loan, while still ensuring that you are not committing to a long-term loan.
Apply For Loans for Bad Credit with Our Help
Bonsai Finance is not a lender. Instead, we work alongside a panel of lenders who offer a range of affordable loans to people with all credit ratings. The lenders on our panel consider verifiable income along with credit history and offer some of the lowest rates of interest. You get an instant decision and funds may be paid out fast if approved. Apply today for loans for bad credit no guarantor UK lenders; funds might be paid into your account within hours of your application. With just one application, you can access several lenders in the UK.
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