Loans are good financial products when we need cash urgently. There are various deals floating in the market and making a choice can be difficult indeed. Lenders are increasingly offering no guarantor loans to UK residents. But what are they actually? Are they even beneficial? We will cover:
- What are no guarantor loans?
- Who can apply?
- How much can you borrow?
- How much do they cost?
- Are there no guarantor loans for bad credit?
- Does a credit check happen?
- Advantages and disadvantages of these loans
- How and where can you apply?
What is No Guarantor Loan?
No Guarantor loan is loan which do not require a co-signer or a guarantor in order to co-sign the repayment of the loan or home mortgage. A guarantor is someone who makes the repayments if the borrower fails to make it, this happens only in guarantor loans.
These loans are a good financial help to those people who don’t have anyone to vouch for them during a financial crisis. There are also payday no guarantor loans designed to last you till the next paycheck. Taking out these loans for your next holiday or paying vet bills can indeed prove worthwhile.
However, lenders are more likely to charge you a higher interest rate if there isn’t a guarantor who can back you. This is good from lenders perspective as they are confident they can get their money back. But, borrowers who haven’t had a reality check of their finances often find themselves deep into debt. Failure to make repayments may land you with a CCJ which you should avoid at all costs.
Who Can Apply for No Guarantor Loans?
Any person who wishes to borrow loans for bad credit no guarantor should fulfil the following eligibility criteria:
- At least 18 years old
- Valid bank account
- Permanent UK resident
- Minimum monthly income from employment or benefits
- Proper address
How Much Can You Borrow?
Usually, every lender has specific minimum and maximum lending amounts. Remember that the amount you borrow should exactly suit your needs. It shouldn’t be either too low or too high. Both can lead to greater financial issues. Most lenders lend no guarantor loans from £100 and up to £10,000. More than this amount you should try for long term loans which are really good options.
How Much Do They Cost?
As is the case with unsecured loans, they come only at a high interest rate. There are two reasons for this: one, the lender doesn’t ask for any collateral and two, having a bad credit may prove quite a deal-breaker. Most people don’t fall within the “good credit” category and therefore, struggle to get access to no guarantor loans. Compare deals for their APR and only then settle on one particular loan product and lender. Some lenders may offer APRs as low as 3.9%.
Are There No Guarantor Loans For Bad Credit?
Yes, nowadays it has become quite common. High-street lenders and banks may refuse credit to people with a poor credit score. However, there are some new and credible lenders who prefer to look past an individual’s financial past and credit score. They believe that history doesn’t necessarily define the future. So, loan approvals purely on the basis of affordability. If you earn enough to be able to afford a bad credit loan without guarantor, well that’s great news. You’ll be eligible with most lenders even if you own up to a bad credit score.
Does a Credit Check Happen?
To be honest, yes. A credit check is done by any lender you apply to. This is basically in keeping with the laws for FCA-authorised loan providers. Care is taken to see that no search footprint appears on your credit file. Because if your file shows too many searches, things become more difficult. Although this doesn’t mean that it’s a great influential factor. It’s worth noting that an affordability assessment matters more for loan providers than what your history has been.
What Are Advantages and Disadvantages of No Guarantor Loans?
- Apply quickly and easily on a lender’s website
- No paperwork involved so time-saving
- No guarantor required
- You can get loans even if you have a bad credit(Bad Credit Loans)
- A higher rate of interest than secured loans
- Riskier to lenders
- Can be hard if you have a very poor credit score
- You have to repay within a few months
How and Where Can You Apply for No Guarantor Loans?
Most lenders have a simple application process. You can apply for no guarantor loans online on a lender’s website. All you have to do is go to their website and click on the application form on the home page. After clicking on the application form, a webpage will open with a number of fields to fill in. After filling it in, click on the Submit button. Your application will land in the credit provider’s inbox and they’ll start the processing. If you get approval, they’ll transfer the cash to your bank account on the same day.
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