For most loans in the past, if you didn’t have good enough credit you would be asked by your bank (or whichever loan lender you were dealing with) to provide a guarantor to be named on the legal contract of your loan. What this meant, is that should you, as the borrower, fail to make payments on the loan, the legal liability would pass to the person named as a guarantor. Of course, not everyone wants to name a guarantor when applying for credit, or even has access to a person who would be willing to be named as a guarantor on someone else’s loan application. This is where loans for bad credit with no guarantor becomes incredibly appealing.
What are Loans for Bad Credit with no Guarantor?
Most loans these days are no guarantor loans, but in recent years the term has definitely changed to have a catch-all meaning to cover payday loans and other types of short-term loans that are designed to give a better chance of borrowing to low-income people and those who are on the look-out for an adverse credit loan. As well as payday loans, types of loans without guarantors include peer-to-peer loans, logbook loans, and personal loans (or unsecured loans as they are also referred to).
Why Should I Look for No Guarantor Loans?
There are several reasons why you might wish to seek out loans for bad credit with no guarantor. If you have been rejected by a high street lender in the past, you might not feel like you are going to be accepted in the future. A no guarantor loan is the perfect way to gain that financial assistance that you need without having to worry that your bad credit is holding you back, or that you need a guarantor to be named on the loan application, undermining your independence.
It is a massive commitment to ask someone to be a guarantor on your loan application. It has been known to destroy relationships if a person is unable to keep up with repayments or have deliberately missed payments that then have a direct impact on the guarantor. Before applying for a no guarantor loan, you should always be fully prepared and have the finances in place to meet strict repayment terms, whether it is a payday loan to be used and paid back within a couple of weeks, or a short-term loan paid back over several months.
Loans without guarantors have opened up the personal and payday loan market for those people who would have otherwise struggled to be given a loan. For many people, rejection from traditional lending streams has been embarrassing, and also left them with an even worse credit score due to hard searches and rejection. No guarantor loans, such as payday loans, provide access to fast and simple money that can be borrowed online in the UK. It is quick and easy to do, and as long as you have the means with which to pay back a loan, it is a way to gain financial assistance without getting into greater money troubles that spiral out of control in the future.