Loans Without Guarantor - How Does This Work?
Loans without guarantor are one of many types of short term loans available in the UK finance industry. Also known as non-guarantor loan, it simply means any type of loan that can be taken out without the need for a guarantor or co-debtor. A guarantor can be a family member or friend with a better credit rating than you do. As the name implies, they will guarantee the loan payment in the event that you default on your loan.
The use of guarantor in loans is a common practice with many lenders since loans were innovated in the market. It is a tool available to lenders to mitigate the risks of borrowing. A guarantor will co-sign with the original borrower into the loan. In the event that the latter is unable to meet their loan payments, the guarantor will be the one to take care of it. It is, therefore, a huge responsibility for the guarantor to co-sign a loan so they need to be informed about their responsibilities beforehand.
Loans without guarantor are a specific type of loan that mostly applies to short term loans. This is designed for anyone who is unable to find or cannot provide a guarantor. This is a recent type of loan that is available in the market as many direct lenders in the past would prefer having one. This is especially true when lenders are dealing with people with bad credit.
Anyone with a bad credit is considered a risk for the lender. But when they have a guarantor, that reduces the risk and enables the borrower access to the money they need. Obviously, this has changed over the years, which is good news for those looking for bad credit loans.
As such, loans without guarantor are marketed towards people with poor credit history. But in order to mitigate the risks of borrowing without a good credit score and no guarantor, borrowers can expect to pay higher interest rates.
If you are looking for no guarantor loans, you have come to the right place. At Money Pig, we can help you find the right loans for whatever circumstances you might be in. Whether you have good or bad credit, with guarantor or not, we can easily match you with the right lender. Our goal is to simplify your loan process to improve your chances of successfully getting a loan. And we aim to achieve this in the shortest time possible so you can expect instant decision when you apply.
If you have bad credit score and need to apply for a substantial loan, you might have searched extensively only to be rejected. You are not alone. Many people with bad credit have found themselves struggling to find a lender who would be willing to lend them money with poor credit. Unfortunately, not everyone has success to a guarantor. What options are available to you?
Worry no more – Money Pig was created for this exact same purpose. We are partnered with multiple lenders in the UK. Most of these lenders specialize in providing loans to people with bad credit. And you can easily secure a loan whether or not you have a guarantor. In some cases, lenders can provide up to £5000 in loan amount, even when you have poor credit.
If you would like to learn more about how loans without guarantor work, the following are a list of common questions that borrowers often ask. You can find the answers to these questions to educate your decision and help you find the right lender for your needs.
FAQs on Loans Without Guarantor
- How do you get approved for loans without guarantor?
- How do no guarantor loans work?
- What are the requirements for no guarantor loans?
- To get a guarantor or not?
- Are there fast loans with no guarantor?
- Why might you need to take out a no guarantor loan?
- How to find loans for people with bad credit without guarantor?
- How much can I borrow without a guarantor?
- What is the cost of no guarantor loans?
- Are there other fees involved with no guarantor loans?
- Do loans without guarantor require credit check?
- What if I am unable to pay off my loan?
- How soon can I get the funds when approved?
- Can Money Pig help me find no guarantor loans?
There was a time when it was nearly impossible to get a loan without a guarantor unless you have an excellent credit rating. But times have changed as there are more lenders offering all kinds of loans in the UK. This means that it is now possible to get approved for a loan without the need for a guarantor.
A few decades ago, loans without a guarantor are a rarity. And for those who were approved for their loan application, they ended up with unfavorable lending terms. But like mentioned earlier, times have changed since and people with bad credit or those who have no access to a guarantor can now get approved for a loan.
You can now shop around for lenders in the UK offering unsecured loans. This type of loan is created for those with no guarantors, or has no access to one. With many lenders offering this type of loan, lenders have to be competitive. This will enable you to shop around various lenders to find better terms and rates.
A no guarantor loan is a type of loan that is offered by many direct lenders these days. They can be obtained without the need for a guarantor. A guarantor is someone who co-signs the loan with you. Hence, the loan is guaranteed by another individual – preferably someone who has a good credit standing. They will “guarantee” your loan to lessen the risk on the part of the lender. Therefore, the guarantor is equally responsible for the loan as you are.
This is a huge responsibility that must be placed on another individual aside from you, who is the main borrower. But since you can now find many lenders offering loans with no guarantor, it gives you more independence to pursue any loans you want.
There are many advantages to this type of loan but it is important to note that there are potential disadvantages, too. As a borrower, you are expected to repay the loan in time. You need to honor the agreement that you made with the lender upon the approval of your loan. The lender is assigning trust to you by not requiring a guarantor to help pay off that loan. It is your way of repaying the lender for the trust given to you since they basically have no safety net when they offer the money that you need.
Each lender will set different criteria for offering a no guarantor loan. The services of a loan broker like Money Pig can help simplify this process for you. By knowing which lenders in the UK are likely to approve your loan, you can focus your application on those lenders and thus receive a loan without affecting your credit score negatively.
Even with a bad credit, you can still qualify for loans without guarantor. Most lenders will require that you demonstrate your capacity to make monthly payments. You will most likely be asked to provide proof of income and employment. Depending on your credit score and the documentary requirements presented, the lender will discuss with you the APR and other terms for your loan. If you agree to these, then you can proceed with your loan application.
Another important requirement when you apply for a no guarantor loan is that you have to be between the ages of 18 and 70. Different lenders will also require a minimum net income (to qualify for certain amounts of money to borrow). However, most would require a valid bank account during application.
This is one of the most puzzling questions that borrowers have to face when applying for a loan with bad credit. Unfortunately, your options are limited and you do not control the terms of the loan. The decision to take out a loan with or without a guarantor will vary based on your unique circumstances. If you have poor credit and have unsuccessfully applied for a loan, then guarantor loans might be the best option for you.
The good news is that as the UK lending market has gotten more and more competitive, there are more lenders who are willing to offer no guarantor loans. This is something that would apply even for people with bad credit. The decision to get a guarantor or not will have corresponding consequences, though.
If you choose to work with a guarantor, you might be able to leverage them to get better rates on your loan. You can ask a family member or a friend to co-sign the loan for you. This is a tricky situation, though, because this is something that they do for you on a trust basis. Make sure you are responsible enough to pay off the loan on time so their good credit standing will not be negatively impacted by your loan. You would not want to ruin your personal relationships based on your inability to live up to your promise of paying off the loan.
On the other hand, you can always go for a no guarantor loan. There are a few options in the market and you can always use a broker to easily find one. The downside is that you might have to pay a higher interest rate on the loan. But this type of loan is hassle-free and faster to process. While you might have to pay a higher interest rate this way, at least you have an option even if your credit is less than perfect.
Yes. There are plenty of short term loans like payday loans that can process your application even without a guarantor. You can speed up the process by providing a complete set of requirements needed by the lender. Once you can provide your personal, income and professional information, most lenders can process that within hours to a day. As long as you qualify, as per the lender’s criteria, it does not matter if you have a guarantor or not.
The primary reason why you would opt for loans without guarantor is because you are unable to find a qualified guarantor. A guarantor needs to meet a certain criteria to qualify as one such as a good credit score. But getting a guarantor to co-sign your loan is a big commitment. They are considered as borrowers to the loan so they are also legally responsible to pay it off (if the original borrower is unable to do so).
Thus, many borrowers opt for a no guarantor loan to spare someone else the trouble. As for the purpose of the money, most lenders do not require borrowers to indicate a purpose for the loan. You can, therefore, use the money to cover for various expenses, such as medical emergencies or payment for other debts. The purpose of the loan will not affect how your application is evaluated.
No guarantor loans are basically made for people with bad credit. If you have good to excellent credit, most lenders would not require a guarantor because they are confident that letting you borrow money is risk-free (based on your credit history). Thus, no guarantor loans are a new type of loan that is designed for anyone who is struggling to get a loan due to bad credit.
There are many loan brokers in the UK like Money Pig that can help you find loans without guarantor, even with a bad credit. We use a tested and proven method to match borrowers to the right lenders. You no longer have to go through the hassle of finding a guarantor. You can apply for the loan you want and get approved without a guarantor.
There is a misconception that borrowing from lenders that offer no guarantor loans would mean unfavorable terms on the part of the borrower. This is no longer the case but you can expect certain limitations on how much you can borrow and at what interest rate you can get them for.
Most of the UK lenders that offer no guarantor loans would set a minimum and maximum amount for borrowers. Currently, the lenders that we work with can offer a minimum of £50 to a maximum of £5000. This value can change based on the discretion of the lender upon the evaluation of your application, but this should give you an idea. Knowing the total amount that you can borrow will help you decide if this type of loan would be a good option based on your financial needs.
The best way to determine how much you can borrow via loan with no guarantor is to submit an application. You can also visit a lender’s website and they will have a loan calculator. You can input details such as your credit score and your income. Using this information, the loan calculator will evaluate how much you can qualify for.
No guarantor loans are considered as high-risk loans (for the lender). When lending money to high risk borrowers, these lenders would impose higher interest rates on these types of loans to reduce the risk of losses. People with bad credit put the lenders at greater risk as they are most likely to default on the loan. The higher interest rate will give them an added layer of security against such loss.
On the other hand, a guarantor would have reduced that risk. Since the guarantor will be responsible for the payment of the loan, should the original borrower default, there is no need to impose a high interest rate on the loan. This explains why a no guarantor loan is more expensive than traditional loans with guarantor (or loans for people with good credit rating).
While higher interest rate is to be expected when you apply for loans without guarantor, it pays to be aware of the prevailing interest rates. Compare the interest rates from various lenders so you can find one that is most favorable to you.
When you apply for no guarantor loans, there should be no other fees involved. Even when you use our service at Money Pig, we won’t be charging additional fees. This is true for all borrowers regardless of your credit rating or other circumstances involved when you apply for a loan.
When you are searching for a lender to obtain your loans with no guarantor from, they have to be transparent and upfront to you about these fees (if any). The same is true when it comes to your interest rate. The rate that applies to your loan should be the same as the one that you agreed upon by the time of release of your funds.
No. All loan applications, including loans without guarantor, must undergo a mandatory credit check, as per the policies of the Financial Conduct Authority (FCA). All the lenders that we are associated with will conduct a credit check, albeit a soft one, for anyone who wishes to apply for the loan. This is an important step to obtain key information about the applicant especially with regards to their ability to repay the loan. Since this is a soft credit check, it won’t affect your credit score whatsoever.
Still in conjunction with the guidelines of the FCA, all lenders are required to conduct a full credit check upon the approval of your loan. Once you are considered eligible for the loan and prior to acceptance of the loan offer, a full credit check is conducted.
Beware of lenders who claim to offer no credit checks on loans without guarantor. If they said this, they are not completely being honest with you. Otherwise, they could be penalized by the FCA for the violation of its guidelines. The worst case scenario is that you could be dealing with an illegitimate lender.
When you obtain loans without guarantor, you need to strive to make on-time payments. This will help you boost your credit score and have better chances of getting approved in the future. There are many services in the UK that can offer free debt and financial assistance to those who might need it. Make sure you check them out to improve your credit score and financial situation.
The time frame with which the funds are released upon approval of your application will vary from one lender to another. If you are opting for a short-term loan, you can expect the funds to be deposited within the day or the next day once you accept the loan offer. It is important to comply with the requirements during application as it will help to speed up the processing of your loan and release of funds.
Money Pig is a loan broker in the UK that was created to help make it easier for consumers find the right lenders for their needs. We aim to make the loan process as smooth and efficient as possible. But we understand that each lender has their unique set of criteria when they offer loans to consumers. We take this into account in helping borrowers find the ideal lender who are likely to approve them for a loan.
We are connected with several lenders in the UK- some of these require a guarantor while others do not. Even with a poor credit, you can apply to these lenders who do not require guarantor. You can use our list of recommended lenders to narrow down your choices and ensure that you get instant decision on your application.