Guarantor loans can work well for some people, particular if a person has a bad credit rating. However, they are not in favour by all due to one reason or another. If you don’t want this type of loan but your credit rating is less than perfect you might be asking the question, are there any types of loans that are no guarantor loans?
You will be happy to hear there are numerous loan options on the market that does not need you to ask someone to stand as your guarantor. In this article, we will talk about those options and what the loans offer.
Why People Try to Avoid Guarantor Loans
As mentioned before a guarantor loan is a great option of a loan if you have a poor credit rating and want to borrow a large sum of money and spread out the loan repayments. The downside is that you need someone who is willing to put their hand up to say they will take over the repayments in the event you find you cannot manage them.
First, you have to be willing to open your heart to someone, which is going to be a good friend or relative, and tell him or her you cannot get a loan on your own back. This alone puts many people off from guarantor loans. You might not even have someone to ask or you might be worried that by asking you will put the relationship in jeopardy. Fear not as there are other choices.
The types of loans that do not require a guarantor to stand by your side are:
- A payday loan;
- Short term loan;
- Personal loan;
- Secured loan.
Out of the four suggestions above, we are only going to focus on the first three. This is due to the fact that a secured loan requires you to put something of value up against the amount borrowed. If you fail to repay the loan, you lose your possession, usually your vehicle or home.
Advantages of a Payday Loan
You might have heard about payday loans as they did earn quite a bad name in the past. However, the dreadful name was not earned by the loan itself but by some unethical lenders who charged extremely high fees and interest along with failing to check that the loans were affordable. The loan itself can work exactly how it is designed to work. That is to provide a small sum of money to meet any financial emergency.
Payday loans usually provide a sum of money in-between £100 and £500. This is generally more than enough to cover a financial emergency. This might be to cover a bill that has dropped through the letterbox, which you had forgotten to pay and it is due before your next payday. To meet repair costs to your home, appliances or vehicles. Even to get you out of an unauthorised overdraft as payday is some time away. Yes, a payday loan can work out cheaper than paying fees to the bank for going into an unauthorised overdraft.
The advantages of a payday loan:
- No guarantor required;
- Borrow between £100 and £500;
- You can repay the loan over one to three months so it isn’t hanging over your head;
- The loan is quick to apply for;
- As the amount is small there is more chance of approval with a poor credit rating;
- You get an instant decision;
- Funds from the loan might be paid into the bank on the same day.
As with any loan, there are disadvantages. The main one being that a payday loan can work out expensive if you find you cannot make the repayments. This is due to more interest being added on along with fees and interest is added on daily.
Advantages of a Short Term Loan
A short-term loan is considered a step up from a payday loan in regards to how much you might be able to borrow and is among the no guarantor loans available. Most lenders will offer between £500 and £1,000 with a payday loan. This provides you with a sum of money higher but it might still be within an affordable range as the loan can be spread out for up to 12 months if needed.
Before rushing in to take out a loan for the whole twelve months do take into account that the longer the term of the loan the more the loan will cost in total. If you can afford to borrow £800 and repay it within six months the loan is going to work out a lot cheaper than had you spread it over 12 months. On the downside as you are reducing the term of the loan the amount you pay each month is going to be more.
Lenders generally do not need to know the reason why you want to borrow the money, which means you could take advantage of a payday loan to cover the deposit of a holiday that is on special offer, and which you well deserve. You could use the money to pay towards Christmas gifts or spend on anything else you desire.
Advantages of a Personal Loan
If you want to borrow a larger sum of money and be able to spread out the loan over some years, you might want to give some thought to a personal loan.
Personal loans come with the advantage of allowing you to borrow up to £15,000 and spread the cost for up to 36 months.
The main disadvantage of the personal loan is that you might not be approved for it if your credit rating is poor. On saying this, it doesn’t mean you cannot get a personal loan, but it will be more difficult. We do work with a panel of lenders who do consider all circumstances and who considers affordability more than your credit rating. However, there is no getting around credit checks, as all UK lenders will perform one.
With a personal loan, you do have to compare the APR as this is going to determine how much interest is going to be added to the loan over the term.
The APR may vary between lenders and usually the lowest is the cheapest loan. Fees will also add onto the cost of the loan, so also compare any fees to find the cheapest loan for you.
Again, spreading the loan out over a longer period can make the monthly loan repayments more affordable. You also have to weigh up that more interest is going to be added to the loan the longer you take it over.
Apply For No Guarantor Loans
In order to be able to apply with lenders with our help you do need to meet basic criteria.
- Have a regular income;
- Be over 18 years of age;
- Live in the United Kingdom;
- Hold a bank account in your name;
- Have a debit card in your name linked to the bank account.
Providing you meet these basic requirements you can tell us how much you need to borrow and how long you wish to repay the loan as this determines which type of loan may be more suitable.
You can then provide us with your personal details. Lenders will need to know:
- The amount you have coming in each month, whether you work or you are on benefits;
- Your bank account number as they will pay the funds from the loan into your account,;
- Your debit card number to take the repayments of the loan back.
We can then search for a loan on your behalf to try to match you with a lender from our panel of lenders. As we work with a huge panel of lenders, there is more chance of us being able to match you with a lender just from one single application. Should one of the lenders turn you down, we can simply go to the next one to try to find a match.
If we match you with a lender, you can go that lenders website to find out more about the loan and finalise it. If you are happy to go ahead after reading the terms and conditions that come with the loan and you have ensured it is affordable, you can sign for it. It may be possible to have funds transferred directly into your bank account within hours.
When you allow us to help you find no guarantor loans, you get a decision within minutes. We can search with a huge panel of lenders, increasing your chances of being matched to a lender. Finally, all lenders we work with will consider your circumstances along with your credit rating and offer some of the most competitive rates.