There are many choices open to people with poor credit ratings looking for bad credit loans without guarantor online. Guarantor loans do have their place on the loan market but they are not a loan suitable for all circumstances due to the fact you do have to ask someone to stand by your side for the loan.
The most suitable option for a loan if you have bad credit will depend on the amount of money you need to borrow but they include:
- Secured loans
- Short term loans
- Payday loans.
There is a limit to how much you might be able to borrow with the loans. The terms of the loans also differ. However, none of the loans needs you to find someone to stand as a guarantor to take over the loan repayments in the event you cannot meet them.
Secured Bad Credit Loans without Guarantor for Long Term Borrowing
First, we will talk about the secured loan as again, this loan is not going to suit the needs of everyone, it does come with a downside and you do have to think about it very carefully.
If you have a bad credit rating and have the need to borrow thousands of pounds, spread out over years you may struggle to find a loan. However, there is one type of loan that lenders may offer, the secured loan.
As the name suggests you need to secure something against the loan. Generally, this is something of extreme value such as a vehicle or your home. This is why you have to consider this type of loan very carefully as you could lose whatever you secured if you cannot meet the loan repayments.
You have to consider the APR on a loan with the lowest APR usually meaning you pay less in interest and the total cost of borrowing. Other factors also have to be taken into account such as early repayment fees in case you are lucky enough to be able to clear the loan off early.
However, it may be one way of borrowing a large sum and spreading out the cost if you have explored a personal loan and your credit rating is too poor for the lender to take a risk.
Short Term Mid-Length Borrowing
The short-term loan falls in the middle of the secured loan and payday loan in how long you can spread the repayments over, and the amount of money you might be able to borrow.
Again as the name suggests this is not a loan spread out over many years. Usually, lenders will allow you to spread the cost of borrowing with a short-term loan for up to 12 months but this depends on the lender. Some might offer a slightly longer term, say 18 months or some less.
Short-term loans may allow you to borrow up to £1,000. Again, this is going to depend on the lender with some perhaps offering more and some less.
Short-term loans do not require a guarantor nor do they require you to secure anything against the amount you want to borrow. Lenders class short-term loans as small loans so they are usually easier to find approval for, even with a poor credit rating.
Payday Loans for Small Sums Paid Back Fast
Payday bad credit loans without guarantor may be one of the easiest of all loans to find approval for if you have a bad credit rating, as the amount you are applying to borrow is extremely small. Another bonus is that the loan is repaid back very quickly so again, you are not seen as being too big a risk to the lender.
Payday lenders will usually offer in the region of £100 to £500 with loans. Some lenders may offer slightly more and the amount you may be able to borrow is going to depend on your circumstances.
Payday loans are repaid either the next time you get paid or spread the cost of borrowing over three paydays. When lenders talk about paydays, they are assuming that you are paid every month.
Interest is calculated on payday loans differently to personal and secured loans due to the fact you are repaying the loan back quickly. With payday loans, interest is added daily. In effect, you could take a payday loan out for one month but your payday might be just 20 days away. In this case, you could pay back the loan when you get paid on the 20th day, and only pay interest for the days you borrowed.
Repaying a payday loan as soon as possible saves you interest, which keeps down the total cost of borrowing. However, if you borrow towards the top end of the payday loan scale, up to £500, you might want to spread the cost of the loan for up to three paydays. In this instance, you would end up paying interest over three months but the lender would split this along with the amount you borrowed over a three month period, which could make the loan more affordable each month. You could pay a portion of the loan each month and still have enough money left over from your paycheck.
Eligibility, Loan Affordability and Verifiable Income
Whatever loan you are considering in the UK you have to make sure that you are eligible before applying. There are just a few checks and these are:
- That you are at least 18 years old;
- You have a regular income;
- Live in the United Kingdom;
- Have a bank account and debit card.
Loan affordability and verifiable income is something that lenders take very seriously when you apply for a loan. They will consider your credit rating and more so if you apply to borrow a larger sum of money spread out over a long period.
However, with smaller loans such as the payday and short-term loan the lender will consider your current circumstances just as much. They will work out the amount of money you have coming in each month and what you payout. Any loan repayments could be made from the disposable income you have left.
We could help you to find suitable bad credit loans without guarantor online by matching you up with a lender. We can introduce you to the panel of lenders we work alongside, all who offer competitive rates of interest, numerous loan options and affordable loans. From one loan application, you can access a range of lenders and you get an instant decision.