You want a loan, but you do not fancy the idea of applying for a guarantor loan. If this is the situation that you find yourself in, you might be asking the question of what are my options for no guarantor loans. Here we are going to focus on those options and the different types of non guarantor loans available.
What Are No guarantor loans?
First, we will clarify what a guarantor loan actually is and why many people choose to avoid them.
The guarantor loan is a specific type of loan that requires that you have someone standing by your side when you apply for a loan. However, it is not a loan that you are guaranteed to get. On saying this, it is often easier to find approval for this type of loan if your credit rating is poor.
One of the biggest downsides to the guarantor loan is that you have to speak openly to a good friend or relative about your poor credit rating and the fact that you cannot get a loan on your own. This alone can cause issues with friendship, while other people do not have anyone they feel close enough to ask.
Whatever reason for wanting to avoid these types of loans you should not worry, as there are many choices of loans out there, even if your credit rating is not perfect.
The Different Types of Non Guarantor Loans
We work with a panel of lenders who consider all circumstances. The lenders offer a range of loans, many of which might be suitable for people with less than perfect credit ratings.
Loans that do not require a guarantor include:
- Payday loans;
- Short term loans;
- Personal loans;
- Secured loans.
Loans that are generally more suited to people who have a poor credit rating are the:
- Payday loan;
- Short-term loan.
Eligibility for All Types of Loans
It does not matter what type of loan you want to take out there will be some eligibility requirements that you have to meet. At the least, you will need to:
- Have a regular monthly income coming in from work or benefits;
- Be over 18 years of age;
- Live in the United Kingdom;
- Hold a UK bank account with a debit card;
- A direct debit can be created on the bank account.
Providing you meet the above criteria there is nothing stopping you from applying for any of the following loans.
A Payday Loan
The payday loan is a very popular type of loan when access to a small amount of money is needed.
In most cases, people who find themselves with an unexpected outlay can apply for a payday loan of between £100 and £500. The funds may be deposited into a designated bank account within hours.
This can provide a lifeline if payday is still some time away but you need to get hold of money now. For instance, you might:
- Need to pay for repairs to either an household appliance you cannot manage without or repairs to a vehicle;
- You might have forgotten all about a large bill and you have now got the final reminder and it needs to be paid in full before your next payday;
- You might have overspent and your bank account is now in the minus, which means the bank is going to charge you for an unauthorized overdraft.
These are just some of the numerous reasons why you might need to get money fast but there are many more. Indeed any financial emergency where a small amount of money is required might be a suitable situation for applying for a payday loan.
You do of course have to ensure that you can afford the loan and you are not going to be left short when payday comes around.
The repayments of a payday loan are not spread out for a long period. In fact, lenders usually allow you to spread the cost out for up to three paydays.
As the amount of money being borrowed is small and the money is repaid back quickly, lenders do not put too much emphasis on your credit rating. Therefore, people with poor credit ratings favour this type of loan. It is also one of the fastest types of loans to apply for and the pay-out is fast.
APR on Payday Loans Can Be Confusing
The APR on payday loans can be confusing as it is often shown as being thousands of percent. This is compared to the double figures of personal loans. What is important to bear in mind here is that personal loans are repaid over many years while the payday loan is paid back within one to three months. Therefore, you are not paying a yearly interest rate, which is what the APR stands for.
You can find out more about interest rates on the Money Advice Service website.
A Short Term Loan
The short-term loan is another of the popular types of no guarantor loans for people who have a less than perfect credit score or who want to borrow a small sum of money but repay it back over longer than three months.
Lenders will usually allow you to borrow between £500 and £1,000 with a short-term loan and spread the cost of the repayments out for up to 12 months. This can make borrowing affordable but take into consideration the fact that the longer you take to repay the loan, the more it is going to cost you in total.
Again, how much the loan will cost is going to depend on the APR, the annual percentage rate. For example, if a loan comes with 30%APR, you can expect to pay 30% on top of the amount you borrowed per year. Also, bear in mind that loans might come with additional fees and these have to be factored in when considering whether the loan is affordable.
Affordability is something that all lenders will check when you apply for the loan. They will do this by asking how much money you have coming in each month and what your outgoings are.
You can apply for a short-term loan for any reason as the lender is not usually bothered what you want the money for, as long as you can afford the repayments.
While the lenders we work with will consider affordability when deciding whether to approve a loan or not, they will also look into your credit file. This does not necessarily mean that just because your credit rating is poor you will not be eligible, but it is something they have to do by law.
Lenders will not put as much emphasis on your credit file if you are only asking to borrow a small sum of money and repay it back within a year, as if you wanted a loan of thousands of pounds spread out over several years.
If your credit rating is fair to good, you might be eligible for a personal loan. With the personal loan, you might be in a position to borrow up to £15,000 with one of the lenders we work with and spread the cost of the loan out for up to 36 months.
Of course, to do this your credit rating is going to be scrutinised with a fine toothcomb.
When considering a personal loan you should compare the APR of the lender as this is going to be what calculates the amount of interest you will pay. Also, check to see if the APR is fixed or variable. If fixed the interest rate will remain the same if variable it will rise and fall in line with the Bank of England base rate. If you have a budget a fixed rate of interest will be better as you will know exactly how much the loan will cost for the term of the loan. With the variable rate, the monthly repayment can fluctuate over the term of the loan depending on whether the base rate goes up or down.
If you need to borrow a sum of money up to £15,000 but your credit rating is less than perfect you might be better off considering applying for a secured loan.
The downside to this loan is you need to secure something against the money borrowed. Generally, this is a property or a vehicle. You should also think twice before doing so as you never know what might take place in the future. If you find yourself without an income to repay the loan you are at risk of losing whatever you secured against the amount borrowed.
The Benefits to Applying for a Loan with Our Help
There are different ways you can apply for a loan but by far the easiest and fastest is to allow us to match you up with a lender from a large panel of UK lenders.
We can help to bridge a gap between you looking for a loan suitable for your needs and lenders who can offer you exactly what you need. This saves a great deal of time and effort on your part.
As we work with a large panel of lenders, you can search for a loan with numerous lenders all from the one single application. This means that you do not have to make several separate applications, all of which take time, but which may also have a negative impact on your credit rating. Each time you search for a loan with a lender the lenders leaves a mark on your credit file. The more applications for credit you make, the more it negatively affects your credit file.
When allowing us to match you up with a lender you will know within minutes if your application is approved. You can then look at the loan in more detail to make sure that you know what you are getting into. When considering this check:
- You know how much you will be paying in total for the loan;
- How much interest is added on;
- Whether the total includes fees, if not how much will it cost in fees;
- Whether there is an early repayment fee in the event you find you can repay the loan early;
- How much the monthly repayments or going to be and when they will be taken by direct debit;
- If taking out a payday loan the dates of your payday or paydays are correct.
Don’t flounder online trying to find a lender willing to offer you a loan without a guarantor. Whether you are looking for a small sum of money in the region of £100 to £500, a short-term loan offering £500 to £1000 or up to £15,000 with a personal loan, we can match you with the perfect lender for your needs.
To start your application just tell us the amount of money you would like to borrow and how long you want to borrow the money for and we will search within a panel of ethical UK lenders.
Providing you meet the criteria for a loan in the UK and the lender thinks you will be in a position to afford the repayments of the loan there is no reason why even people with a poor credit rating cannot get the financial help so desperately needed.
All of the lenders we work alongside offer a range of affordable loans that come with some of the most competitive interest rates. You will get an instant decision so you will not be left waiting for hours or worse still days, to find out if your application has been successful. In some cases, the funds from the loan may be paid into your bank account within hours. This is essential if a financial emergency has come up and you need money fast.