When you are head over heels in debt, you ought to look for ways to improve your credit situation and a majority of online borrowers search for unsecured credits. For, it is not simple to borrow the same from conventional lenders. With Brexit in process, households with low-income groups or those with high debt to ratio, are finding it harder to contact lenders. Herein loan brokers can come to your rescue, and yield a host of no guarantor loans despite your low score.
What is a guarantor?
A guarantor is somebody who pays off the rest of your loan repayments if you can’t. Lenders use underwriters to give them more certainty that they will get all of the money they lend you back.
Your guarantor signs a contract with your lender that states that they will take on the liability of paying the rest of the loan instead of you if you are unable to make the payments.
What is a no guarantor loan?
No guarantor loans are short-term credits which don’t require you to have a co-signer. There are many reasons why people can’t find a suitable guarantor. Perhaps your family is unable to help you out financially, or you solely may not want to ask them.
Many people have trouble finding a guarantor because, for the guarantor, it’s quite a big commitment they may need to make- if you can’t meet the repayments. Not only this means that they have to potentially settle their money on the line, but they also have to risk their credit score in the process.
No guarantor loans do away with the requirement, and if a lender is happy and they think you’ll be able to make the repayments without the help of a guarantor, they’ll grant you the money.
What are the eligibility criteria that your guarantor must meet? Usually, your guarantor must:
- Be aged between 18 and 75,
- Have a good credit score and history, and,
- Be a homeowner (this is the case for many, but not all, lenders).
Let’s find out 6 smart tips to apply for a loan without guarantor:
- Beware of loan sharks
Despite FCA’s strict guidelines, a lot of loan sharks operate in the UK. Being a person struggling with loan problems, you need to be cautious while picking the lender. You should ensure that you only deal with FCA registered financial organisations. For registered brokers and lenders- keep the loan terms crystalline, and your stakes are safe with them.
- Apply with broker
When you apply with the help of a designated loan broker, they help you locate the registered lenders proposing the cheapest loans in the UK. They do not charge any upfront fees for and most of them ensure a soft credit check on your loan request. Thus it is safe to apply with FCA registered loan brokers.
- Affordable loan
You must always look for an affordable instalment loan so, as to ensure the easy repayment of the loan.
- Low-interest rate
Make sure you compare and moderate the interest charge accurately. The broker would yield all available deals, and you should choose judiciously.
- Why unsecured loan
It is essential to know why you need a loan without a guarantor. With an unsecured loan, you do not have affixed burden of repaying the loan. On the other hand, secured loans risk the ownership of collateral on non-repayment.
- Repayment plan
The broker would help you outline a loan repayment plan suiting your net income. You must try to stick to the design until the fulfilment of the loan. With successful repayment of the credit, your creditworthiness would significantly upgrade.
However, brokers are not loan sellers but precisely the aide that can help you get a beneficial credit deal. They help borrowers locate loans with minimum troubles. The entire process could be completed online without any delay.