Can I Get A Loan With Bad Credit and No Guarantor? Here’s How to Do It
If you’re wondering how to get a loan with bad credit and no guarantor, our guide explains everything you need to know, including where to look for them and how to boost your chances for being approved.
There are many reasons why you might want to get a loan, it might be you need further financial support, you may want to streamline some existing debts, or you simply need more help with an important purchase. Whatever the circumstances might be, if you have bad credit and no guarantor, you might be under the impression that a loan is out of the question.
However, this isn’t actually the case and you do have some options available that could see you secure the financial support you’re seeking.
In this guide, Simple Fast Loans have explained how to get a loan with bad credit and no guarantor and we’ve answered a variety of key questions on this subject. Read on to find out more.
Bad credit explained
Firstly, let’s take a closer look at what having ‘bad credit’ actually means.
If you have bad credit, this is often because your credit history has examples of you failing to be financially responsible and doing things like not making repayments or meeting repayment terms on things like loans, credit cards and mortgages.
These negative influences are then logged in your credit history, which the UK’s Credit Reference Agencies (Experian, Equifax and TransUnion) use to calculate your credit score. In this situation it would most likely be low and considered to be a ‘bad credit score’.
To some lenders you may also be viewed as having bad credit if you have little to no credit history – as they essentially have nothing with which to accurately assess your creditworthiness.
How can bad credit affect getting a loan?
If you have bad credit, you may find that some lenders will reject you if you apply for a loan, or they may only offer you a smaller loan or one with a higher interest rate.
This is because these lenders will view you and your bad credit as a higher risk for a loan, particularly if there’s evidence of you missing or making late payments.
In addition to this, if your bad credit continues without improvement or gets worse, some lenders may also increase your interest rates on any existing loans you have with them. However, they can only legally do this if they have a clear and legitimate reason for doing so.
What is a guarantor?
To help reduce the risk when lending to those with bad credit, another option some providers suggest is to have a guarantor.
A guarantor is someone who essentially ‘guarantees’ to repay any debt or make outstanding payments on your loan if you’re unable to. Typically this can be anyone over 21 years old who has a good credit history, but it’s more common for people to ask family members to be their guarantor on a loan.
Some lenders will make exceptions and accept guarantors who also have bad credit, but this is quite rare. Lenders will also run a number of checks on the person you put forward as your guarantor as well, the results of which can again affect the size and interest rates on your loan.
What is a no guarantor loan?
There are of course instances where people are unable to find or use a guarantor for a loan, so many providers now specifically offer ‘no guarantor loans’ to support those who find themselves in such circumstances.
These are an increasingly popular option for people with bad credit, which is why they’re often now often referred to as bad credit, no guarantor loans.
What are the benefits of no guarantor loans?
As well as the obvious benefit of these loans being an option for those with bad credit and no guarantor, there are a number of other potential advantages. These include:
- You can save time by not having to source a guarantor – even if you could get a guarantor, it can still take a while to find the right person. This is then more time spent without the finance you need.
- There’s less paperwork – in addition, the application process can be much more straightforward if the lender is only dealing with you.
- Only you will take on the responsibility – by not having a guarantor you also won’t be putting any financial burden on anyone else, you will take full responsibility.
- You can be approved quicker – with all the above, the approval process can also be speeded up.
- Some lenders can provide you with such loans in the same day – there are also lenders who can pay you a loan if you have bad credit and no guarantor in less than 24 hours.
What can bad credit, no guarantor loans be used for?
There are a number of reasons that you might be looking for these loans, but they’re particularly popular for those of us looking to secure additional support quickly or on an emergency basis.
This might cover unexpected issues in your home or your personal life, such as:
- An unexpected repair is needed for your boiler or on your white goods.
- That your car may also need repairing or may need additional work following its MOT.
- That you need to pay a medical bill.
- You’ve had a family emergency and need to pay for travel to visit or support someone.
- You may need support in paying off other outstanding or pending debts on things like your mortgage or another existing loan.
What to consider before applying for a loan?
While you’re doing your research and looking for lenders who have bad credit and no guarantor loans, there are some other considerations to make before you think about applying.
Much like when you apply for any other loans or credit, this isn’t a decision to take lightly and you should think about the following first:
- How much do I realistically need to borrow?
- What repayments will I be able to make without having a guarantor?
- What interest rate do I want?
- What are the eligibility criteria for the lenders and what information will I need to provide? (This should be clear on their website).
- Have I considered all my options before going through with the application process?
How can I boost my chances of being approved?
It can also be worth looking into how you can improve your bad credit before you start applying for these loans.
By making a few positive changes you can potentially boost your chances of approval and may even be offered more favourable deals or interest rates on your loan.
Here are a few approaches to try:
- Check your credit report with any of the UK’s CRAs to see your credit score and get an idea of what you could do to improve it.
- If you see any mistakes on your credit report (e.g. incorrect names or addresses) get these up-to-date.
- If you haven’t done so already, register for the electoral roll, as this makes it easier for lenders to find and verify your personal details when they run their checks.
- Close down any joint accounts you might have with other individuals who have bad credit, as these can drag your score down.
- If you have the time and the ability to do so in the short term, you should look to pay off or start regularly repaying any debts or payments you owe in full and on time. This is a very effective means of giving your bad credit score a significant boost and proving to lenders that you can responsibly make payments.
Where can I get a loan with bad credit and no guarantor?
To conclude on a positive note, in the UK there are now lots of lenders who are prepared to offer loans for those with bad credit and no guarantor – it’s just a matter of shopping around, asking the right questions and finding the right choice for you.
These loans are something we offer here at Simple Fast Loans. Our 18-month personal loans for instance are subject to some eligibility and affordability criteria, but we will consider you if you have a bad credit history and no guarantor. We treat each case on its own merit and with us you could see your loan quickly approved and paid by bank transfer within 15 minutes.
So now you know how to get a loan with bad credit and no guarantor and the options we have available, why not get in touch to see what we can do for you?