Understanding No Guarantor Loans in the UK
Have you ever had a loan application rejected by a lending institution because you couldn’t provide guarantors? Well, you are definitely not alone. A good number of direct lenders in the UK require loan applicants to have at least one guarantor for their loans to be approved.
While it’s understandable that lenders want to reduce their risk, not everyone is in a position to provide guarantors. If you have bad credit, it’s even harder because most people will be reluctant to agree to repay your loan in case you default.
Thankfully, there is an option out there for people who, for one reason or another, cannot find a suitable guarantor. This is definitely great news for people looking for quick loans because they don’t have to go through the process of finding guarantors.
How can I apply for a no guarantor loan?
The procedure for applying for this type of loan is quite simple. If you are making your application online, you will find the application form on the lender’s website. Once you fill out the application, the lender will examine your details and, if satisfied, release the funds to your bank account. In most cases, this will happen within 24 hours.
Can people with bad credit get loans without guarantor?
The simple answer is “Yes”. There are some lenders who have no problem approving these loans even in cases where applicants have a poor credit rating. Of course, that makes them riskier for the lending institutions and one of the ways they minimize their risk by offering the loans at a slightly higher interest rate.
If you have bad credit, loans without guarantor not only make it possible for you to access money, but they also give you the perfect opportunity to improve your credit score. By making timely payments, you will slowly build up your credit and give yourself an opportunity to get loans at significantly lower interest rates in the future.
What are some of the benefits of no guarantor loans?
The fact that you don’t need to provide guarantor information makes the process simple and quick. In fact, are some lenders who will approve your applications and transfer the funds to your account in just a matter of hours.
Since you can conduct the entire process online, you don’t have to engage in a long conversation with loan officers or spend time calling the lender. You can complete the entire application process from the comfort of your home and still have the money disbursed to you.
3. Improving your credit rating
For someone who wants to improve his or her credit rating, this loan offers a great opportunity. However, it is important that you make the payments in good time because late payments can end up aggravating your situation.
A no guarantor loan is a perfect opportunity for people who find themselves in sticky financial situations. The fact that you are not given any conditions on how to spend the money means that you are free to spend it how you deem fit. However, it is important that you take the loan for the right reasons to avoid digging yourself into a financial hole.