In the event you can’t make a payment, a second party or guarantor to be on standby to pay for you and this is no guarantor loans.
When you should fall short of money and you aren’t in a position to ask somebody to help you, Loans without a guarantor can be a good financial solution. However, if there is a guarantor present, some lenders are more likely to accept loan requests. This is because they can be more assured that the money they lend will be repaid.
So, here’s a simple handy guide to get into the details of no guarantor loan.
Who exactly is a Guarantor?
A guarantor is someone who if you are unable to, agrees to make the rest of the repayments on your loan. Agreeing to take responsibility for settling your loan instead of you, your chosen guarantor enters into a contract with your lender.
For the lender, they need to undergo both credit check and an affordability assessment to feel happy that if it was left to them, they would be able to afford the monthly payments. You can check out the guarantor loan faqs.
What are the criteria for being a Guarantor?
Your Guarantor must:
- Be a homeowner in many cases
- Have a good credit history
- Be in the age range of 18 and 75
For the type of person, they feel happy as a guarantor on a loan, various lenders have different criteria. On their website, they don’t generally share these criteria and to support your application, this can make it difficult to find a suitable person.
Whom the No Guarantor Loans are best suited to?
Among borrowers, No guarantor loans are very popular– every year, millions of them are taken out in the UK. Since, rather than both your guarantor and you, lenders only need to complete one credit search on you; the application process takes less time.
This makes getting a rejection or approval for your loan application fast and easy. When you need the money in a hurry and have to cover emergency expenses like boiler breakdowns and car repairs, this makes them ideal.
You may be worried it suggests that you may have difficulty in repaying a loan if you have a poor credit score and they ask for a guarantor, which if a borrower does default, allows them to offset the risk to them. But, to be honest, there is nothing to worry about going with no guarantor.
If you don’t have a guarantor, most lenders don’t worry about it. Tailored to you, No guarantor loans are sometimes called personal loans, which for you to be accepted, do not require any collateral or guarantor. From lender to lender, the exact criteria to be approved for a no guarantor loan vary.
How one can build Credit through Loans with No Guarantor?
Borrowers believe that if theirs is the only name on the application, then to be accepted for credit, their credit score is not high enough. This the major reason why rather than personal loans, borrowers opt for guarantor loans. You can get your queries verified in the guarantor loan faqs.
When you otherwise might not have been, Guarantor loans give a chance for you to be accepted for finance. To boost your credit score, paying it off in full and on time after obtaining one allows you to build up credit in your name.
To rebuild your credit score and to get access to the money you need, the same opportunity is offered by a no guarantor loan if you do not have anyone willing or able to act as your guarantor.
