There are several reasons that lead to the rejection of loan applications of thousands of people. It doesn’t necessarily mean that those people are not fit to get a loan from a bank, financial institution, or from a private lender. An individual’s loan application may be rejected by a lender while the same application may get approved by another lender. That means the lending criteria of the credit providers are different. No guarantor loans are designed for people who do not wish to involve any of their closed ones in their own financial matters. We sometimes do not feel comfortable talking about our personal finance with our friends and family. So, we feel it is simply unfair for us to ask them to vouch for our loan application.
What is a No Guarantor Loan?
A no guarantor loan is a financial product that allows a borrower to take out a loan without asking them for a guarantor or a co-signor. The borrower has the legal and moral responsibility to pay off the loan plus the interest without any fail. Almost all the short-term loans do not require a guarantor. If you are planning to borrow a long-term loan without a guarantor, you must have an excellent credit score. Typically, lenders ask for a guarantor if they find your profile to be risky. In case of a bad credit score, the lender gets an indication that your past relationship with debt was not up to the mark due to which, they may either ask you for a guarantor or they may offer you a loan with a high rate of interest.
Difference between Guarantor Loans and No Guarantor Loans
Alternatives to No Guarantor Loans the risk with guarantor loans is high because if you default on the loan, your guarantor has to repay the debt on behalf of you. This might put a dent on your personal relationship with them. A guarantor loan is a good option if you know and are sure that you will make all the repayments on time and in full. You will get loan offers with low-interest rates.
If you do not wish to borrow a no guarantor loan and you want to check other alternatives that are available for this loan – here’s a list of all those options:
1. Credit Card
If you have enough credit card balance, then you may use the credit card for the expenses. There are zero per cent interest credit cards that you can take benefit of. Use the card and repay the entire balance within a time frame (specified by the credit card company) so that you do not have to pay any interest charges.
2. Payday Advance
Ask your employer to give you a payday advance if they can. Sit and discuss the situation with them and let them know about your approach for the repayment. If you share a good bond with your employer and you are a good employee of the organization, there are chances the employer will agree to your proposal.
3. Credit Unions
You can borrow money from credit unions at a very low rate of interest. Credit unions are community savings cooperatives. It is run and funded by the members of the committee to help each other during times of need. They lend money to their members at an affordable rate. The maximum APR they charge is 42.6% and in Northern Ireland, the maximum APR that is charged on the loan is 12.9%.
Get in touch with your bank to help you with an authorised overdraft. It basically allows you to go beyond your limit – which means take more than there is in your account. But please remember that the interest charges are very high and you have to repay the bank within the agreed time or else it may have serious consequences that will damage your financial future.
How to Find the Best Loan without a Guarantor?
To find the best loan without a guarantor in the UK, you have to consider the points given below:
- How much do you wish to borrow?
- What is the maximum amount that you can afford each month for the repayment?
- What is your credit score?
- How long are you planning to take the loan for?
While applying for a no guarantor loan, you need to check the eligibility criteria of the lender you are applying to. Not all the lenders will offer you a loan without a guarantor. Review their criteria and if you think you fit in, go for the submission of your loan application. Because every time you submit a loan application, the lender will conduct a credit check to assess it. Whenever a credit check is conducted on your profile, a few points are knocked off from your score. To protect your credit score from damage, you need to ensure that you are fit according to the lending standards of the lender.
Apply with Loan Princess for a No Guarantor Loan
Loan Princess is an FCA registered loan broker and not a lender. We have a partnership with some of Britain’s most loved and reputed lenders who offer a wide range of unsecured personal loans in the UK. If you decide to take a loan through us, you do not have to invest much time and efforts. We will do all the work to find you a lender that suits your needs and requirements. We match lenders and borrowers in seconds using our state-of-the-art computer system. We’ll contact all the lender we think you’ve got the best chance of having your application accepted and, then, we present you with the very best deal we’ve found. You don’t have to accept any offer we find for you and our service is free at all times.
To start your application, click here.