What if you need a short-term personal Loan but you don’t have a guarantor to vouch for you or a good credit history to support your application? Even if you have a less than perfect credit history, there are plenty of lenders who may be happy to work with you without a guarantor.

But what is a no Guarantor Loan and how can it help you?

What is a guarantor loan?

A guarantor loan is taken out by a borrower when someone has a poor credit history and therefore they can’t secure a loan from a bank or building society normally.

This is because, with a guarantor loan, a family member or friend signs a contract to honour your remaining debt in full if you can’t keep up with your repayments. Your guarantor will need to go through exactly the same affordability and credit checks as you to when you apply for your loan.

Why do lenders ask for a guarantor on a loan? Because it assures them that their money will be repaid in full if you’re not able to. Normally, you’ll need to find a guarantor who:

• is 18 to 75 years old
• is a homeowner
• has a good credit score and history
• is in stable, full-time, well-paid employment

What is a no guarantor loan?

A no guarantor loan is a type of short-term loan where the lender does not need a guarantor. For many people wanting to take out a loan, it’s hard to find a family member or friend who would happy to stand as a guarantor because of all the financial risks involved.

For borrowers who can’t find a suitable guarantor, a no guarantor loan is an attractive alternative.

Benefits of a no guarantor loan

Bad credit histories accepted

If you have a low credit score, you still have a good chance of being accepted for a short-term no guarantor loan. While most lenders view customers with bad credit history as high risk, the lenders who we work with generally don’t reject your application on the basis that your credit rating is poor. They tend to look at you and your life as a whole when making their decision.

Affordability checks

You shouldn’t worry about affordability checks – in fact, they’ve been put in place to protect you.

Affordability checks safeguard people who want to borrow money by ensuring that they aren’t given a larger loan than they can afford to repay.

If you apply directly for a no guarantor loan, the lender you apply to will carry out an affordability check. If the lender is happy with your credit score and that you have enough spare money at the end of the month to comfortably make the repayments in full on the days they are due, then there’s a strong chance that you will be get the money you’ve asked for.

Decision in seconds

After you complete the application process for a no guarantor loan, you won’t be left waiting days or weeks to find out whether you have been accepted. Most decisions come back to you within seconds so that, if you need money now to cover an emergency for which there is not enough money in your current or savings account, you’ll know whether the cash will be available to you.

Faster payment

If your no guarantor loan application is accepted, you won’t have to wait long to receive your money. Most lenders will transfer your short-term loan within 1 hour with some taking as little as 10 minutes to put the money in your bank account.

Great for emergencies

Because decisions and payments are made so quickly, it’s a greatoption for those that need to cover an unexpected bill fast. Life is unpredictable – one morning,your washing machine may break or your car may break down on the way to work.

If your rainy-day savings pot doesn’t cover your emergency expenses, then a no guarantor loan will be a suitable solution for your situation as long as you can afford the repayments and not put yourself at any financial hardship by doing so.

No early repayment penalties

You can take out a no guarantor loan and, if you want to repay your debt early, you can do so without paying an early repayment penalty.

If you can pay your loan off early, it makes better financial sense to do so because you’ll stop paying interest on the day you settle your loan in full.

No need to ask friends or family to take a risk for you

For most people, asking a family member or friend to be a guarantor on a loan can be very embarrassing. It can even damage relationships built up with friends and families that have lasted for years if they’re forced to pay off a loan that you can now longer manager.

In today’s financial climate, it’s increasingly difficult to keep on top of your own finances so signing a legal contract to become liable for someone else’s loan is just not an option for most people. It’s even harder if you have just moved to a new location and you have no nearby friends or family at hand to help you.

With a no guarantor loan, you can eliminate the stress of finding a suitable guarantor and the feeling of being a financial burden on your loved ones.

Financial Conduct Authority protection

The Financial Conduct Authority have put the following safeguards in place for borrowers taking out payday loans and short-term loans:

• You will never be charged more than 0.8% interest per day (the equivalent of £1.60 everyday when you borrow £200)
• If you miss a payment, you won’t be charged more than once, and that default fee can’t be any higher than £15
• If you struggle to repay your loan, your lender must follow certain rules to support you
• Your interest payment and default fees paid over the course of your loan won’t add up to be higher than the value of your loan.

All payday loan lenders and brokers must be licenced by the Financial Conduct Authority. BestUnsecuredLoans and all of the lenders on our panel are FCA-registered and -licenced.

Best ways to get a no guarantor loan

Broker versus direct?

If you apply for a no guarantor loan with a broker, you won’t have to spend hours applying to individual lenders who may not even accept your application. With a broker, you only need to complete one application.

Each lender has different criteria for their ideal customer but these profiles aren’t generally published online. This means that, even if you spend hours applying to multiple lenders, all your applications could be rejected because you don’t fit their criteria.

Lenders however do share information with brokers on the types of borrowers they like to work with. By using a broker, you can let them do the work needed to match your individual circumstances to a lender or lenders who would be happy to advance you the money.

Have all your details to hand

When you apply for a no guarantor loan, you need to have the following information at hand:

• Personal details, such as your date of birth
• Your current and past addresses
• Bank details
• Monthly expenditures and income
• Employment details

No security needed

A no guarantor loan is an unsecured loan and that means that you don’t have to put up anything you own as collateral.

None of our lenders will ask you to pledge your home, your car, or anything else of yours as a condition of taking out the loan. If you fail to keep up with the repayments and your loan goes into default, your lender can not take anything away from you.

Apply for a no guarantor loan through Best Unsecured Loans

If you’re looking for a no guarantor loan, apply with Best Unsecured Loans to find the right lender for you.

Because we’re a broker, your single application gets sent to our network of loan providers who all look at the details you’ve sent through and, if they’re happy to lend to you, they’ll then tell us their best offer. We compare all of their offers so you get the cheapest and best value loan possible. We want to find you a loan that works just for you.

 To apply click here.