If you find you need a loan but you have a poor credit rating, a guarantor loan may be suitable. However, these types of loans are not without issues, you have to find a guarantor and the interest rates are usually high. Not to worry as we are going to talk about three popular types of loans without guarantor that you might want to consider.
The loans we are going to look into here include:
- Payday loans;
- Short-term loans;
- Personal loans.
The most suitable one for you will depend on the amount of money you wish to borrow, how long you want to take to repay it and your credit rating.
Fast Payouts with Payday loans without Guarantor
If you are looking for a loan so you can get your hands on money fast and you know you can repay the loan back quickly you might want to consider a payday loan.
The typical payday loan might offer between £100 and £500. The loan might come in handy if you find yourself suddenly short of money until your next payday and a financial outlay that is unexpected has cropped up. Reasons where a payday loan can help include:
- Paying for repairs to a vehicle if it has broken down, needs new tires or you forgot to budget for its MOT;
- To pay for emergency household repairs such as a water leak or replace tiles on the roof;
- To pay for repairs or to replace a household appliance;
- To put funds back into your bank account if you have overspent and gone into an unauthorised overdraft and the bank charges high daily fees.
In any of the above cases, you could apply for a payday loan and have the money paid into the bank on the same day. You could use the money to pay bills, which relieves the stress and worry, and then repay the loan as agreed.
In some cases taking out a loan this way can even save you money in the end.
For example, if the bank is going to charge you daily and your next payday is some time away.
Another example might be if you cannot afford to have the car repaired and it would mean you have to take public transport. You would have to find money to pay for public transport, which is not cheap and still have to repair the car when your next payday comes around. In this case, borrow the money, repair the car, then repay the loan the next time you are paid.
Payday loans originally where loans that were taken out only until the next payday. The amount borrowed has interest calculated on a daily basis. This means when taking out a loan for 30 days, 30 days interest is calculated and added onto the loan. The total amount including interest is taken out of the bank account by the lender on your next payday.
However, if you want to spread the cost of the loan for up to three paydays it is possible. This means the amount you borrowed is spread out over three months, so three months of interest is also going to be added to the loan. This means the loan is going to cost you more in total, something you need to consider.
It is also important to make sure that a payday loan is affordable before signing up. The FCA has stepped in to make sure that lenders do not charge people more than twice the amount they borrowed, in the event they cannot repay the loan. However, it is wise to make sure that you can afford the loan and the repayments are not going to leave you without money when the lender takes back what you owe.
Instant Decision with Short-term Loans
A short-term loan is another consideration for a loan if you do not want to borrow a large sum of money.
Lenders will usually offer up to £1,000 with a short-term loan and the repayments can be spread out for as long as 12 months. This is going to depend on your financial status and your credit rating of course, and some lenders may offer less or some more.
As with any loan, the longer you take the loan over the more interest you are going to pay on the loan. Spreading out the loan may lead to paying slightly less each month for the repayments, but the total amount of the loan is going to be higher.
Borrow Up to £5,000 Over 36 Months
The lenders that we work with will allow you to borrow up to £5,000 and spread the cost of the loan over 36 months with a personal loan.
There are some things to consider when applying for a personal loan, including:
- Personal loans are more difficult to obtain with a poor credit rating;
- The APR of the loan will determine how much interest is added to the loan;
- The poorer your credit rating the higher the APR;
- Personal loans may be offered with fixed or variable rate interest. If fixed the APR remains the same so the monthly repayments do not fluctuate. If variable the monthly repayments can rise or fall depending on the Bank of England base rate;
- The longer you take the loan over the more it will cost in total.
Lenders generally do not want to know why you need a loan, so it can be taken out for any reason.
Make Sure You Are Eligible for A Loan
To be able to apply for a loan in the UK you need to make sure that you are eligible. Before making your application, ensure that you can meet the following requirements.
- You have a regular income (some types of benefits may be classed as a regular income);
- You are at least 18 years old;
- You live in the UK;
- Have a bank account in your name;
- Have a debit card attached to your bank account;
- A direct debit can be set up for the lender to take the loan repayments.
Why Credit Ratings Are Taken Into Account
It does not matter which type of loan you want to apply for, your credit rating is going to affect how much you can borrow.
Credit ratings are taken into account by lenders, as they are a sign of how you have managed credit in the past. This gives them an indication as to how likely you are to repay the loan in full and on time.
Your credit file is also going to determine the amount of interest applied to such as short-term and personal loans. Unfortunately the poorer your credit score, the higher the risk you are deemed to be, so the higher the APR on the loan.
Lenders We Work With Take Verifiable Income into Account
It is not all bad news for people with poor credit ratings though as the panel of lenders we work alongside will also consider verifiable income when considering whether to offer you loans without guarantor.
This means that they will check to verify that you have a regular income coming in and what you pay out each month. This tells them if you can afford to repay the loan you are asking to borrow. So even while you might have earned a poor credit rating in the past they take into account your circumstances might have changed and you might be in a position to borrow.
Benefits of Applying for a Loan with Our Help
We are not lenders ourselves; instead, we work to bridge a gap between those looking for loans and a panel of UK lenders offering some of the most affordable rates.
The lenders we work alongside provide an instant decision and if we cannot match you with one lender, we can simply move onto the next. You benefit from this as we can search with a range of lenders and you only have to fill in your information once.
Another benefit to this is the time it saves, as you know within minutes if you can get a loan and, as you are not making multiple applications they are not noted on your credit file, which go against you.
The panel of lenders we work with offer numerous loan options, so whether you are looking for a payday loan, short-term loan or personal loan, we can help to bridge the gap.
To apply for a loan with our help simply tell us how much you want to borrow and how long you would like to take the loan over.
Give us your details, including your name, address, date of birth, income details and bank details and we can search with the full range of lenders on our panel.
If we match you with a lender, you can go over the details of the loan to make sure that it is the right loan for your needs and if all is well, sign up there and then.
You do not have to wait for a decision, nor do you have to wait for paperwork to be sent out for you to sign and send back. Depending on the lender and the amount of money you asked to borrow, the funds from the loan may be paid into your bank account on the same day, even within hours of your application. Apply for loans without guarantor today with our help.
Here are some other interesting articles from out website:
Loans without Guarantor UK Even With Bad Credit
Why Loans without Guarantor Might Be a Better Option for Borrowing
Loans for Bad Credit No Guarantor? No problem