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Types of Loans without Guarantor UK
24 Jun 2019

Different Types of Loans without Guarantor UK

You want a loan but you don’t want a guarantor loan! Luckily for you, there are different types of loans without guarantor UK available and we can help you to find one.

There are loans that offer only a small sum of money to tide you over until the next time you get paid and there are loans offering larger sums of money which you can spread out for up to 36 months. The most suitable one for you is going to be dependent on your circumstances, what you want the loan for, how much you want to borrow and when you can repay it.

When looking for a loan that does not require a guarantor you might want to consider the following:

  • Taking out a payday loan;
  • Applying for a short-term loan;
  • A personal loan.

The above are three of the most popular types of loans on the market that do not need you to ask a third party to stand as a guarantor.

With any loan, you are going to have to meet certain requirements, whether you have a good or bad credit rating.

These include being over 18, having a regular income, a UK address and a bank account with a debit card attached to it.

If you meet these requirements, you can go ahead and check out the details of each of the loans below to decide which might be the most suitable.

How Payday Loans without Guarantor UK Work

The payday loan is a loan that is generally applied for if you have been met with a sudden financial outlay and money is short.

For example:

  • You might have forgotten about a large bill and the final demand has dropped through the letterbox. You do not have enough money to pay it until your payday and that is some time away.
  • Your car might break down and need to go to a garage for repairs but again you do not have the funds to pay for it.

These are just two prime examples where a payday loan might work in your favour. You could borrow the money, pay off the bill or pay for repairs, and then repay the loan on your next payday.

How Much Can I Borrow With A Payday Loan?

Most lenders will allow you to apply for a payday loan of between £100 and £500. This is usually more than enough money to meet an unexpected outlay and tide you over until you are paid.

Do I Have to Pay the Loan In Full On My Next Payday?

While payday loans are typically taken out until the next time you are paid and then paid off in full, along with any interest incurred, lenders will usually allow you to spread out the loan for up to three paydays.

By doing so, the interest is calculated on a daily basis and added onto the loan and the repayments split over three paydays or months. This can help to make the loan more affordable, but bear in mind that the total cost of borrowing is going to be more than had you paid the loan off in one month.

When considering taking on a payday loan it is important to double check that the loan is going to be affordable and you are going to have enough money left over on payday to survive until your next payday.

Payday loans should be considered as emergency loans and they are not a loan that you should rely on from month to month, which is known as a payday borrowing cycle and which can lead to serious debt problems.

How a Short-Term Loan Works

A short-term loan is another type of loan where the amount you might be able to borrow is relatively small in comparison to say a personal loan.

Most lenders will offer you between £500 and £1,000 with a short-term loan. Lenders generally allow short-term loans to be repaid for up to 12 months.

This is also one of the types of loans without guarantor UK residents can apply for when needing money for any reason and you might be approved the loan even if your credit rating is less than perfect.

You can generally take up to 12 months to pay off the loan but you have to consider that the longer you take in repaying the more interest is going to be added onto the loan.

The monthly loan repayments can be kept down by spreading the loan further but find a fine line between them being affordable and not paying too much out in interest.

How a Personal Loan Works

A personal loan is aimed at people who want to get access to a larger sum of money, generally up to £5,000 but may be more.

This is a longer-term loan with lenders allowing you to spread the cost of borrowing for up to 36 months. You have to take the APR into account with a personal loan. This is the annual percentage rate, which is going to determine how much interest is going to be added onto the loan over the term.

Again, as with all loans, the least amount of time you take the loan over the less interest is going to be added onto the loan. Therefore, it is in your best interest to take the loan out over as least time as possible.

A personal loan can usually be taken out for any reason, such as to pay for a holiday or to consolidate credit card debt where the interest rate is high.

Can I Get A Loan With A Bad Credit Rating?

Whether are not you will be approved for a loan if you have a bad credit rating is going to depend on how bad your credit rating is, and your affordability to repay the loan.

Some loans are easier to find approval for than others are. For instance, the payday loan and short-term loan only allow you to borrow a small sum of money and the loan is repaid back quickly. Lenders are more likely to approve a loan of this nature than a loan of thousands of pounds spread out over many years.

However, we do work with a panel of lenders who will consider all circumstances and who offer a range of affordable loans without guarantor UK residents can apply for.