In years gone by, guarantors were generally only required for tenants in order to secure a lease. Recently, more lenders have been requesting a guarantor for loans, car finance, and mortgages in order to minimize their risk, particularly if the applicant has a poor or limited credit history, but this isn’t convenient for everyone. Many people are looking for loans without guarantor and bad credit, particularly if they’re looking to rebuild their credit rating, and who may not have a suitable guarantor candidate available.
What Is A Guarantor?
A guarantor is a person who is liable for the debts of another person, should that person default on their payments. They are often family members, but can be a friend, or even a university (though this is reserved for students in need of housing support), and they must have good credit, and be a UK resident, because it is easier for lenders to pursue legal action against a person in the UK than aboard. Equifax has a full explanation of what a guarantor is and how becoming a guarantor can affect them.
Why Would I Not Use A Guarantor
There are many reasons that people don’t want to use a guarantor to secure a loan. Sometimes they don’t have anyone who is either willing or able to be a guarantor. They might feel uncomfortable about asking a loved one for financial help, or they have moved to the country recently and do not know anyone living in the UK well enough to ask for help.
Whatever the reason, the decision to apply for a loan when you have a poor or limited credit history without using a guarantor isn’t an easy one, and it can be difficult to find the best rates available.
Should I Apply For Loans Without Guarantor And Bad Credit?
Before you apply for loans without guarantor and bad credit, you should think about why you are doing so, and why you are applying without a guarantor. Are you applying without a guarantor because you are embarrassed about needing one? If this is the case, it is highly recommended that you speak to the people in your life who might be able to help, because your bravery might be rewarded with the help that you need to get a cheaper loan. If a guarantor is still not an option for you, think about why you need the loan.
- Do you need the loan?
- How much do you need to borrow?
- Can you afford the monthly repayments?
- Can you still afford the monthly repayments if you have a sudden or unexpected bill?
- Do you understand the terms of the loan?
If you can honestly answer ‘yes’ to these questions, and you have realistic expectations on what you can afford to borrow, then applying for a loan without a guarantor is entirely reasonable.
How Can I Find The Best Loan Rate?
Finding reasonable interest rates for loans without guarantor and bad credit can be extremely difficult. A lot of the lenders that are willing to take a chance on people with a rocky credit history negate their risk by charging higher-than-average interest rates. That doesn’t mean that there aren’t lenders who are willing to give people the benefit of the doubt, however. This is where Bonsai Finance comes in. Having been in the finance industry for many years, we have build up a vast network of like-minded lenders who we have built up fantastic relationships with. We’re able to work with these lenders to find the very best interest rate you and your individual situation. Speak to us today to see how we can help you step out of the darkness and into your financial future.