No Guarantor Loans

  • No guarantor needed
  • Borrow £100 to £500k+
  • Tenants & Homeowners OK
  • Unsecured & Secured
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Loans without a Guarantor

While a guarantor loan may improve your chances of getting your unsecured loan if you have bad credit you may find it hard to find the right person to guarantee repayments.

If this is the case then there are some alternative loans you can consider. But in each case, you will need to be prepared to either pay a higher APR% (for unsecured options) or offer an asset as security (though you will be able to get a lower APR%).

 

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What Does Having No Guarantor Mean?

When you have credit problems lenders are worried about making risky loans. If you provide a guarantor then the risk is reduced. The lower risk means you can typically borrow at a lower interest rate. So guarantor loans are typically less expensive than other bad credit unsecured loans.

But if you don’t want to involve a friend or family member or simply can’t find the right person there are still other ways of borrowing the money you need:

  • Stick to the unsecured route and pay a higher interest rate than you would with a guarantor loan
  • Offer the lender an asset with which to secure your finance. Typical security includes vehicles and houses (that obviously you need to own). These so-called secured loans will take longer to organise but, especially in the case of homeowner loans, will enable you to get a much lower APR% than you could with an unsecured alternative.

 

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Surely Not Having a Guarantor is More Costly?

If you have credit problems but need to borrow then the challenge is still to get what you need at the lowest price. Getting someone to back you is one way to cut the cost but, as mentioned above, it is not the only way. So a no guarantor loan does not necessarily have to be more expensive.

What you are trying to achieve is to allay the fears of the lender that you won’t repay their money. They assess the specific risk of lending to you based on your credit history and will set the price on this basis. If you can underwrite what you borrow by providing something valuable (your home or a vehicle, for instance) then you should be able to borrow at a more competitive rate – but remember that with secured loans the asset you provide is at risk if you don’t keep up the repayments.

Unsecured Loans with No Guarantor

The impact on APR% of not having a guarantor

The APR% for a guarantor loan is in the region of 40 – 50%. The interest rate for an equivalent loan without a guarantor could be in the region of 70% or more. It depends on the lender and their pricing policy (some offer flat rates, others “price to risk” and look at your credit file in more depth). The rate you are charged may also depend on the amount you borrow.

It’s also worth noting that there is more competition in the guarantor loans market these days and we work with lenders who offer rates as low as 19.9% APR. If a guarantor is an option for you then there’s nothing to stop you comparing quotes from the different types of lenders and then making the judgement that suits you. If you like the idea of lower cost finance and don’t mind asking a family member or friend to act as your guarantor then you’ll have more choice.

If you can’t find someone to support you then does that mean that you’ll always pay more for bad credit personal finance?

 

Compare Loan Options – Make the Right Choice

Standard unsecured lenders are bringing in sophisticated technology to allow them to assess the specific risk of lending to people with credit problems. They will set the interest rate for the personal loan on the basis of precise personal circumstances. You can get a quote online now using our free service (see below).

Meanwhile, guarantor lenders are not yet really “pricing to risk” so the rate you pay is more of a “one price fits all”. But this opens up an opportunity for you if your credit file has issues but they’re not necessarily that bad.

 

What to do now

If high street lenders have refused your applications and you know you have credit issues we would suggest this as a course of action:

  1. Consider if you would or could use a friend as a backer – if you can then you have the first option. You can apply for a guarantor loan and get some quotes (knowing you aren’t obliged to proceed)
  2. You can also make an enquiry for a no guarantor personal loan – and via our website you can find out which of this new stream of lenders can help AND your precise quotation.
  3. Then compare both sets of quotes and judge which one suits your situation best.

 

Win-Win Outcome?

It is possible that if you only have modest credit problems that you could get an unsecured no guarantor loan at a lower rate than a guarantor loan!

 

Our Money & Credit Guides

If you’re uncertain which type of credit might suit you or you have a money problem then one of our guides may help you. We summarise each type of loan and their pros and cons and address issues regarding debt and credit ratings.

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Written/Reviewed by: Amanda Gillam

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