If you have a bad credit rating, a guarantor loan may be the best way to find approval for a loan. However, this type of loan does come with a big downside. You need to find someone you are comfortable in talking to about your finances. That person is also required to put their trust in you that you can repay the loan, otherwise, the repayments fall back onto them. So what other options are there to loans for bad credit no guarantor?
Guarantor loans are a very popular type of loan for people with poor credit to apply for but you might be surprised to find there are several options of loans that might be available to people with bad credit.
Of course, whether or not you are approved is going to depend on your circumstances, as all lenders will want to make sure that the loan is affordable to you. The most suitable loan to apply for is also going to depend on the amount of money you want to borrow and how long you need to borrow the money.
Types of loans that you might be eligible to apply for and be approved for include:
- Payday loans – the easiest type of loan to get approval for with bad credit;
- Short-term loans – also easy to get approval for with poor credit;
- Secured loans – relatively easy to be approved for;
- Personal loans – not the easiest to be approved for with bad credit.
Are You Eligible For Loans For Bad Credit No Guarantor?
Before rushing into applying for any loan, you might wish to check that you do meet the criteria for borrowing in the UK. This will help save a lot of time. While the panel of lenders we work with are not too strict and will consider all circumstances, you must meet some basic criteria.
The first is that you are old enough to get a loan. This means you are at least 18 years of age.
Second, you are required to live in the United Kingdom. You will be required to have a bank account in the UK and the lender will want this information from you when you sign up. The bank account should be in your name.
You are also expected have a debit card attached to the bank account and the account should accept direct debits. This is so the lender can take the loan repayments from your account on the due date or dates.
It is understood that you also have to have a regular income coming in from work or benefits.
Which Loan Might Be Most Suitable For You?
There is no getting away from the fact that you will have to undergo some form of a credit check when applying for a loan. The lender will also factor in your current circumstances so do not be too discouraged.
If your credit rating is not so bad, perhaps you were just late with a couple of payments in the past, you might be eligible to apply for any of the above loans and be approved.
On the other hand, if your credit rating is very poor you might be limited to the type of loan and amount the lender will offer you. In cases where the credit rating is very poor, you might be better off applying for short-term, payday or secured loans. If you only want a small cash sum of money the short-term or payday loan might be the best solution, for larger sums of money a secured loan might be offered.
We will now look into the different types of loans that you might want to apply for, that does not need a guarantor when applying.
Why Choose A Payday Loan?
You might want to choose a payday loan if you want a small amount of money to pay for something unexpected that has cropped up. Payday loans are popular and while they were once considered an expensive way of borrowing, they are in fact cheaper than the fees associated with going into an unauthorised overdraft. Clearing an unauthorised overdraft is one of the uses of a payday loan.
Payday Loans Are Regulated
Payday loans are now regulated which means they are less costly than when they first arrived on the market when some lenders gave the loans a bad name by charging more than twice what was originally borrowed.
It Is One Way of Getting Your Hands on Cash Fast (Often the Same Day)
A payday loan can work as intended providing it is repaid as agreed. It can be a great way to get hold of emergency cash that you know you can repay when your next payday arrives. It is even possible to spread out the repayment over three paydays, but bear in mind that more interest is added on, as interest is added daily.
It Could Save You Money In The Long Run
When you take into account the worry and stress a payday loan can do away with if you need money fast, it may be well worth considering. As mentioned above, if you were to go into an unauthorised overdraft it could cost you up to seven times in fees what a payday loan could cost you.
The Application Is Fast and Easy
Applying for a payday loan is quick and easy. Typically, you can apply online by leaving just a few details and within minutes get an instant decision. If you apply for your loan with our help, we will match you up with a lender from a panel of UK lenders, all of whom offer competitive rates and loan options.
This means that you are in a position to search for a loan with a range of lenders by making only one loan application so it does not affect your credit rating.
You Can Use a Payday Loan for Any Reason
A payday loan can be used for any reason, as the lender generally isn’t interested in why you want the money. Usually, payday loans are taken out to pay for something unforeseen that has come up. This is possible owing to the fact that the loan is quick to apply for and money may be paid into your bank within hours of the application.
Here are some common reasons people apply for payday loans:
- Perhaps you lost your wallet with your money in it and you need a couple of hundred pounds to tide you over until next payday;
- You have a bill that needs paying before payday and it is the final reminder and cannot wait;
- You might have repairs that need making to the car after it breaks down unexpectedly;
- You thought you had more money in the bank that you actually do and have overspent sending you into an unauthorised overdraft and the fees are costly;
- You have to replace or repair a household appliance that broke down and you cannot wait for payday.
These are only a few of the many reasons where it may pay to take out a payday loan.
How Much Can I Borrow With a Payday Loan?
Payday loans offer small sums of money, generally, this is between £100 and £500 but this is going to depend on the lender and your circumstances. As with all loans, lenders will check your ability to repay the loan. With the payday loan, lenders generally do not worry too much about your past credit, but they may perform a soft credit check.
How Long Can I Repay The Loan Over?
The payday loan is only a small loan and this means that the length of time you can repay it over is small. This is usually on your next payday, but most lenders will allow you to spread the repayments over up to three paydays.
By spreading the loan over three paydays, it means you are not taking the whole loan repayment out of one paycheck. However, on the downside, you will pay more in interest on the loan in total. You could choose to spread the loan over three paydays but pay the loan back faster if you find you have the money to do so. A payday loan does not usually have an early repayment fee attached to it, so this is a good way to keep the costs down to a minimum when borrowing this way.
Why Choose A Short-term Loan?
If you want to borrow more than what is allowed with a payday loan, and spread out the repayments over longer, a short-term loan might be better. It allows for some flexibility in repayments without committing to a loan for many years.
A short-term loan might be more suitable if you want to borrow between £500 and £1,000 and spread the loan repayments out for up to 12 months. Some lenders may allow you to spread the loan out longer but the longer you take to repay the loan the more it is going to cost you in interest.
Spread the Cost of Repayments For Up To 12 Months
With short-term loans, you do have to consider the APR as this is going to determine how much interest the lender adds on. Going for a loan with a lower APR is better if you have a choice to compare loans from different lenders.
Pay the Loan Off Early To Save Money
A short-term loan will be repaid on a monthly basis by direct debit from your bank account, for the term of the loan. By paying off the loan sooner than the agreed term you could save money on interest but be aware there might be an early repayment fee.
Why Choose A Secured Loan?
If your credit rating is very poor and you need to borrow a larger sum of money you might be offered a secured loan. This means that the lender asks you to put something against the loan as collateral. This is generally your property.
A secured loan does permit you to borrow large sums and spread the cost over years. However, the downside is that your property, or whatever you put up against the loan, is at risk if you cannot pay the loan off.
Why Choose A Personal Loan?
Just as with the secured loan, the personal loan allows you to borrow a larger sum of money and spread the cost of the repayments over a longer period.
Generally, you do have to have a reasonable credit rating to be offered a personal loan and certainly to expect a low APR on the loan.
While it is not impossible to find approval for a personal loan if you have poor credit, this type of loan is more difficult to obtain. On saying this, the lenders we work with will consider all circumstances and providing you have enough disposable income left after your monthly outgoings and have a regular income coming in, there is no reason why you should be turned down.
There are numerous options for loans for bad credit no guarantor and the best one depends on your circumstances and how much you wish to borrow. We work with a panel of lenders in the UK who will consider all applicants, good or bad credit, and who offer affordable loan options with competitive rates. The lenders we work with offer loans from £100 to £5,000 and you can spread the repayments over 1 month to 36 months, depending on the type of loan you take out. You can make a single application to search for the most suitable loan for your needs and it has no impact on your credit rating.