Considering the financial challenges these days, availing of loans has become a regular practice. Gone are the days when people used to obtain loans when they had extreme funding needs, and no other option was available. Nowadays, loans have become necessary not only in managing financial emergencies but also in fulfilling financial needs.
Furthermore, getting a loan requires the completion of specific terms and conditions. These are like having a good credit score, loan collateral, full-time income, and a guarantor. Every condition has its own advantages, but at the same time, it imposes certain restrictions in front of the borrowers.
For instance, if you know a person with a good financial record and owe a home, you can agree him/her to be your guarantor while signing the loan contract. On the other hand, the absence of such a reliable person can cause trouble convincing mainstream lenders to allow you a loan.
Due to these circumstances, the direct lenders have brought the concept of no guarantor loans in the UK. However, it is more than a facility than a concept and helps many loan aspirants. Do you know who the primary beneficiary of such a funding option is? People with poor credit scores. They have financial credibility, which could be more trustworthy.
How can a person agree to become someone’s guarantor when he has a bad credit record? You will also deny being someone’s guarantor. Still, you need funds. It is where loans with no guarantor come in handy.
Considering the growing importance of such loans, I thought it would be wise to prepare a blog on this loan and guide all loan aspirants like you. Therefore, let us start here.
Describing What No Guarantor Loans Are
Loans can be applied with a guarantor and with no guarantor. Guarantor loans are primarily the long-term funding source where one gets a considerable amount to borrow for a longer duration. The interest rate will be lower as lenders have no risk of losing their loan money.
No guarantor loans are particularly short-term funds where the primary borrowers have no compulsion to have a person who can act as their guarantor. Lenders have to trust their financial capability. For this, borrowers have to prove their loan affordability. These will be suitable for short-term financial needs, as only a small amount is allowed for a shorter term.
The nature of these loans reflects instant funding access, especially during the financial crisis. Do not forget that such funding options are available online, and same-day funding is always possible.
Uses of No Guarantor Loans – From Standards to Special
You can assume that personal loans have inspired the concept of no-guarantor loans. Therefore, one can use these loans for multiple financial purposes. However, you cannot avoid affordable borrowing as it is mandatory.
Financial emergencies: As I have been emphasising right from the start here, no guarantor loans in the UK are the particular products suitable during financial emergencies. Suppose you have a medical emergency, your wallet is stolen, and you need to pay a restaurant bill, car breakdown or any other situation where arranging the guarantor is impossible. Therefore, these loans are helpful here.
Planning for holidays: Most of the time, you have planned for the upcoming holidays and kept savings in your account. Sometimes, you must confront an urgent expense like a hotel booking cancelled at the last minute or you need to change the hotel once you arrive. In such conditions, these loans will fetch instant funds for you.
Managing study expenses: Students are also the primary beneficiaries of these loans, especially those living away from their families. Eventually, they need extra funds to complete a major assignment or pay living expenses. Students can get easy funding to manage their expenses by applying for loans without a guarantor.
Improvement in the credit score: A few people will be aware that these loans prove advantageous in credit score improvement. It is simple where they have to pay all loan instalments in their capacity, as no guarantor is involved. If they do so, it will positively impact their credit score.
Fill the funding gap: You can use no guarantor loans for long-term purposes. How? Suppose you plan to buy a new car but do not have extra funds to pay its booking amount. Here, loans with no guarantor can be helpful because of their instant funding feature.
Advantages of No Guarantor Loans – From Minor to Major
For the last few years, the demand for small loans has increased. Of course, the reason is continuous financial struggles. Nevertheless, loans are doing their work i.e. to help the locals here in the UK. Given below are some benefits of loans without a guarantor.
Loans make you responsible: You have no companion to repay the loan on your behalf. Only you will do this task. Therefore, you will become more responsible financially as your credit score will be at stake.
Acceptance of bad or very poor credit: Perhaps the most vital benefit is the availability of loans for bad credit with no guarantor. Yes, lenders have no issue accepting your past credit record as their focus will be on your monthly income and loan affordability, accordingly.
Instant funding: As I focus on throughout this blog, no guarantor loans provide immediate funding. There are two reasons. First, it is evident that no third person is involved, and it saves a lot of time. Second, loans are available online to apply with no paperwork. Isn’t it amazing?
No credit check: At some point, you may have a chance to avail of these loans with no credit check. However, it is very rare and available only when you have handled your recent payments well. Or you have repaid a previous loan with the same lender.
In a nutshell, no guarantor loans are like a financial saviour for those individuals who have been facing financial issues perpetually and struggling with the menace of low credit scores. In both situations, these loans are beneficial, but affordable loans are the only thing that maintains supreme significance.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
