Bad credit loans with no Guarantor
If you have a bad credit rating, you'll probably find that your borrowing options are limited.
At best, you'll be charged extremely high-interest rates on your borrowing and will probably only be able to borrow a relatively small amount of money. At worst, your loan applications will be rejected and may leave further marks on your credit file.
A bad credit rating makes you a bigger risk for lenders. They'll charge more, and be less likely to lend, because your financial history indicates that you might not be great at money management.
Fortunately, bad credit loans with no guarantor may be an option to attain a loan without a sponsor. Other options are to have your loan backed by a guarantor. Your guarantor should be someone that owns their own home and has a good credit rating, or has exceptionally good credit if they're not a homeowner. This person is someone that lenders can trust to have savings available, or to be able to meet your loan repayments. If you fall behind on repaying your loan then they'll be expected to pick up the slack. A guarantor has to trust you to be able to manage your loan, and should be aware that they'll be financially responsible if you cannot, or do not, keep up.
Lenders are more likely to provide loans if people have guarantors, because they have a higher chance of getting their money back. They may charge lower interest rates, and approve loans when other lenders won't. Unfortunately, not everyone is comfortable asking a family member or close friend to commit to covering their debt.
If you are in desperate need for a loan but do not have a guarantor, then it is likely that a lender that offers bad credit loans with a guarantor or sponsor will be the best option for you. This also may mean that the lender charges slightly higher interest rates and adjusted repayment terms due to your bad credit history.
Do i need a guarantor to apply for a loan?
You may find it difficult to get accepted for a loan if:
- You have a bad credit history
- You are applying for a loan of a large value
- You are a student
- This is your first loan
- You have taken out more than one loan
- You are unemployed
What loans can i get without a guarantor?
Typically, almost every loan is available without the need of a guarantor, however some lenders may require you to have a guarantor particularly if you have bad credit. For most people, short term loans such as payday loans, and those of a lower value will not require any form of guarantor. However if you have a bad credit history the direct lender you apply with may insist on you getting a guarantor if they feel that you may struggle to repay the loan.
To understand why lenders sometimes require a guarantor, let's look at it a different way. Suppose your friend wanted to borrow money from you, but this particular friend had a reputation of not paying money back to people, you would not want to lend your own money to this person. Now suppose another friend, who had money and had a great reputation of paying people back promised to repay your other friends money to you should he fail to repay the full amount. It then becomes a lot more likely that you would be willing to borrow money to your friend. This is the same way that lenders look at individuals with a bad credit history. Having a guarantor can increase your chances of getting a loan, however they are not always needed depending on the type of loan you are applying for.
In summary, payday loans, short term loans and small loans can be taken out without a guarantor, anything of larger value such as a car loan will require a guarantor.
Why do some lenders require a guarantor?
Some lenders require a guarantor to reduce the level of risk. If you have a bad credit rating, there's a good chance that you'll default on repayments and struggle to pay off your debt. Guarantors have good credit ratings and are often in much stronger financial positions, providing a safety net for lenders. If the original borrower stops paying back their loan, the lender can still collect their money.
Guarantors willing to back loans are often parents or grandparents in more stable financial situations, or can be close friends that feel confident that you'll keep up your loan repayments. These people need to believe that, despite your poor credit rating, you'll be able to manage your debt. It can be very hard to find someone that you're comfortable asking to act as a loan guarantor, and that meets the lender's requirements. It's often even more difficult to convince a potential guarantor that you're worth the financial risk, and won't leave them responsible for your loan.
What options do I have if I do not have a guarantor?
In the past, if you didn't have a suitable guarantor, you had very few borrowing options. Lenders weren't comfortable taking on that level of risk. Now, there are many more lenders accommodating a wider range of circumstances. You'll almost certainly find lenders that can offer bad credit loans without guarantor requirements.
Borrowing without a guarantor may mean that you're paying more over the course of your loan term. But, this financial sacrifice is often worth it to avoid the trouble of finding a guarantor. Luckily, not having a financial sponsor no longer means that you can't get the money you need. Bad credit loans without guarantor requirements are provided by trustworthy, reputable lenders. You can compare lenders and loans before making a borrowing decision. There's no need to put yourself at risk by borrowing from loan sharks or making risky financial decisions.
There are very few options other than applying for guarantor loans if you do have a bad credit rating. You may also be approved for a credit card with high interest rates, but this does limit your spending options. With a loan, you can spend the money on card or as cash wherever you want. Many places do not accept credit card payments, which might make this option more limiting. Alternatively, you can find ways to build your credit rating if you don't need the money immediately. Unfortunately, building your credit rating is a slow process and often requires other borrowing. With a better credit rating, you open doors to cheaper loans and higher approval rates.
I have bad credit and no guarantor, can i still apply?
Yes, you cans till apply for a loan if you have bad credit and do not have a guarantor. In fact there are certain lenders that specifically only offer loans for individuals with a bad credit history. If you have a bad credit history it is likely that you will need a guarantor to increase your chances of getting accepted for a loan. However if you have bad credit and no guarantor to help strengthen your application you can still apply.
If you have been refused credit elsewhere due to your bad credit history, a guarantor may be the only option. Alternatively there may be other forms of finance available to you.
Interest will be added onto the money that you've borrowed. You'll pay back more than you originally took from the lender. Before you borrow, make sure that you understand your monthly repayments and the overall amount that you'll owe.
If you borrow £400 over 90 days, you may be expected to pay back a total of £561.92 in three monthly instalments of £187.31. The additional £161.92 is the interest that you pay for borrowing.
Is this still available if I have a bad credit rating?
It's still possible to borrow if you have bad credit and no guarantor. Lenders that offer loans without guarantor requirements have assessed the level of risk, and will charge interest rates that reflect your poor credit rating.
Though you may pay more than someone with a great credit score, you'll still have access to the money that you need. You also have a good chance of being approved, even if your credit file shows imperfections.
Many people have a poor credit file due to past financial mistakes that they've learned from, or financial difficulties beyond their control. Others have a low credit rating simply because they haven't borrowed in the past, and have nothing on their credit file to show that they can keep up with repayments. Often, a lack of credit history is just as bad as a poor one.
Lenders understand that those that need money most are often those with negative marks on their credit reports. As a result, more lenders are now offering loans without guarantors for those that don't have the option. Even if you have a bad credit rating, there is a very good chance that you'll be approved for the loan that you need.
Which direct lenders offer no guarantor loans?
The majority of lenders will offer loans without a guarantor, however if you have a bad credit history, the direct lender can also insist that you have a guarantor. Most of the UK direct lenders will only offer a loan to someone with a bad credit history if the individual has a guarantor that will ensure the amount is repaid in full if they fail to repay the loan. If you are applying for a small value loan such as a payday loan, the direct lender may not require you to have a guarantor due to the value of the loan being very small.
Can i get a loan without a credit check?
If you wish to apply for a loan but do not want to have a full credit check carried out, you can apply through a loan eligibility checker first. The loan eligibility checker will assess your chances of getting accepted for a loan and will show you lenders that are likely to accept your application. Another added benefit of the eligibility checker is that it does not carry out a full credit check, only a soft search.
Unfortunately there is no such things as loans with no credit checks as a credit check is used to determine the overall affordability of the individual that is applying for the loan. For example if you apply for a loan and no credit check is carried out, this could result in you borrowing money that you can not afford to repay back and as a result you could get yourself into further financial difficulty.
How do i apply?
You can apply online with payday pixie using our application form. Applying takes 5 minutes, you will also receive an instant decision. If approved you could receive your funds within 15 minutes of applying if your bank is able to process faster payments. To speed up the whole process, we require you to include as much information in the loan application form as possible, this will help to prevent further delays.
To apply for a no guarantor loan, we require the following information:
- Personal details such as name and address
- Purpose and loan amount
- Employment status
- Monthly expenditure and outgoings
- Bank account details (the account you want the loan being paid into)