No guarantor loans are a form of loan where the security isn’t provided. That means to secure the loan, you do not need a guarantor or co-signer. It implies that you can apply for a loan without needing the support of another person.

It is helpful first to understand what a guarantor loan is and what a no-guarantor loan is. A guarantor loan necessitates the agreement of a family member or friend to repay the loan if you are unable to pay back the amount borrowed in full. It frequently facilitates loan approval for those who have a poor credit history.

On the other hand, a no-guarantor loan doesn’t require anyone else to back up your application or step in if you are having trouble making your payments. You alone are in charge of seeing that the payments are made. Personal or secured loans are two examples of distinct types of no-guarantor loans.

No guarantor loans operate in the same way as other conventional loans. The main distinction is that you are not required to have a co-signer or guarantor to receive the loan. Instead, to determine your eligibility for the loan, the lender evaluates your creditworthiness using your credit record, credit score, income, and employment.

You apply for a no-guarantor loan with a lender. The lender will evaluate your loan application and repayment ability to offer you a quote. If you agree with the interest rate and APR proposed to you, you may proceed.

While borrowing a no-guarantor loan, you must decide the amount you need to borrow and the time you will take to repay the loan to the lender.

Once you sign the agreement with the lender, you will have to repay the loan with the interest as agreed by you till you completely pay it off.

Advantages of Borrowing a No Guarantor Loan

• No guarantor loans do not require you to find someone who will co-sign your loan application. It removes the dependency on finding someone who will agree to take a financial burden to help you. 

• If you repay the loan responsibly and as agreed with the lender, your credit score will improve. 

• Online lenders specialising in no-guarantor loans sometimes approve the loan application and disburse the amount within a few hours or a couple of days of applying for it. 

• You can apply and get a loan with no guarantor, even if you have a bad credit score. Some lenders may approve your loan application with a bad credit score if you can repay the loan.

Disadvantages of a No Guarantor Loan 

• Making payments late or failing to make payments can harm your credit rating. 

• Guarantor loans are sometimes not affordable because their interest rates are often much higher than those of other loans. However, your interest rate will be based on your unique situation, such as how long you want to borrow and other factors like your credit score.

The eligibility criteria for borrowing a no-guarantor loan varies from lender to lender. It is always wise to check the lending criteria of the lender you plan to borrow from. 

However, there are a few common factors that most lenders and financial institutions consider to assess your loan application, and they are: 

• It would help if you were above the age of 18 years 
• You must be a citizen of the UK 
• You must have an employment to repay the loan

When you are planning to borrow a no-guarantor loan, you must know the different types available in the market. Understanding the variety of no-guarantor loans will help you choose the best option. 

Let us learn more about each of the types in detail.

Personal Loans with No Guarantor 

Personal loans are an unsecured form of borrowing. These can generally be borrowed without any guarantor. You do not need any collateral to offer for borrowing this. Some lenders may still offer you the loan even if you have a bad credit score. However, the interest rate may be high if your credit profile is not stellar. 

LoanTube has a wide range of lending partners authorised by the Financial Conduct Authority (FCA). You can get quotes from multiple lenders with a single application form for borrowing a no-guarantor loan with us. 

Payday Loans with No Guarantor 

Payday loans or HCST loans are an expensive form of borrowing. The rate of interest on such loans is astronomically high. Hence, you must avoid borrowing such loans even if you are getting an offer to get it without any guarantor. 

Instalment Loans with No Guarantor 

Instalment loans with no guarantor are unsecured loans you can borrow for a certain period. You can spread the repayment cost over months with this type of loan. 

Bad Credit Loans without a Guarantor 

Your loan application may often get declined if you do not have a reliable credit score. However, some lenders offer loans without a guarantor, even if you have a bad credit score. The interest rate will be high as the risk associated with you is high. 

Before you borrow a no-guarantor loan, you must know how to apply for it. Knowing such things beforehand makes you fully prepared and reduces the chance of your loan application being rejected. 

Let us understand the process of applying for a no-guarantor loan. 

How to Apply for a No Guarantor Loan? 

You can easily apply for a no-guarantor loan with LoanTube and compare multiple quotes from lenders in a few easy steps. 

1. Determine the amount you need to borrow and the time you require to repay it.
2. Visit LoanTube, fill out the loan application form, and submit it. 
3. Compare quotes from multiple lenders and select the one that aligns with your financial goals.

Once you finalise a lender, you will be contacted by them. Borrowing a no-guarantor loan with LoanTube is easy, hassle-free, and time-saving. You do not have to make an effort to apply to multiple lenders, which takes a lot of time as you have to fill out the application forms for each. 

Also, applying to multiple lenders individually will impact your credit score as the lenders will review it. Lenders with LoanTube conduct a soft check on your profile to offer you interest rates and APRs. Hence, your credit score is not impacted. After you finalise the lender, they will run a hard credit check per the financial regulation. 

Required Documentation for the Application of a No Guarantor Loan 

You will be asked to submit a few documents depending on the loan you are borrowing from. 

However, you must keep the following list of documents handy while applying for the loan:

• Proof of age
• Proof of identity 
• Proof of residence 
• Income and employment proof

The lender may ask you to submit other documents while assessing your loan application. 

Processing Time and Approval Criteria 

Depending on the lender, a no-guarantor loan is typically processed and approved within minutes or hours. If you are asked to submit additional documents, it will take the lender to review them and get back to you. 

The approval criteria also depend on the lender you are borrowing from. Every lender has different criteria to approve the loan application. 

With LoanTube, you can borrow a no-guarantor loan up to £35,000. However, whether you can get this amount depends on your credit score, income, and repayment capabilities. Lenders will assess your credit profile and employment status to understand your ability to pay it off. The loan can be borrowed without a guarantor, so the chances of not repaying the loan are also high. Hence, your loan application will be reviewed thoroughly before the lender can determine your best offer. 

Flexible Repayment Terms for No Guarantor Loans 

The repayment can be spread across 12-84 months if you borrow a no-guarantor loan from any lending partners at LoanTube. Choose your repayment period carefully, as it impacts the overall cost of borrowing. The longer your repayment period, the more you will pay interest. 

Keep your repayment period as per your financial circumstances. Check the monthly instalment amount you must pay for the loan and decide accordingly.

Interest Rates and Fees Associated with No Guarantor Loans 

When you borrow a no-guarantor loan, certain fees are associated with it. Interest rate is common as you must pay the interest on the borrowed loan. Apart from that, there are a few other charges you must be aware of while borrowing this loan. 

Annual Percentage Rate (APR) 

The APR is a kind of interest rate shown next to loans and provides a clearer picture of the total cost of debt over a year. The amount you borrow, plus any applicable interest and mandatory fees, are considered when calculating your APR. It can be used to compare loans. 

Late Payment Fee 

Generally, most lenders levy a late fee if a payment is not made on time. If you miss making the repayment as agreed by you while signing the contract, the lender will charge you additionally. The amount they will levy depends on the loan amount you have borrowed and their internal criteria. 

Early Repayment Fee 

Also, if you settle the loan before the agreed-upon loan term, the lender will charge you an early repayment penalty. When you repay the loan early, the lender will miss out on the interest they could have earned had the loan continued to be active. A prepayment penalty is charged to the borrowers to compensate for the missing money they could have made. 

However, other charges could be associated with a no-guarantor loan. It is better to check with the lender before signing the dotted line. 

When you apply for a no-guarantor loan, your credit profile will be assessed by the lender you have applied to. Let us understand in detail how borrowing a loan impacts your credit score. 

Impact of Credit Score on Borrowing a No Guarantor Loan 

Lenders typically conduct a hard credit check on your report when you apply for a no-guarantor loan. The lenders assess your credit score and history to determine your creditworthiness. 

A few points get deducted from your score when a hard credit check is conducted. However, your credit score will improve if you borrow the loan and manage the repayments on time. 

All the lending partners with LoanTube conduct a soft credit check to offer a quote to you when you apply through us. A soft pull doesn’t impact the score. Later, when you agree to the loan offer, a hard credit check is conducted per the regulations. 

No Credit Check Loans Without a Guarantor 

It is a scam if you are offered a no credit check guarantor loan. You should immediately report it. As per the Financial Conduct Authority, all lenders must run a credit check on the borrower’s profile to offer a quote. So, if someone offers you a no credit check without a guarantor, it could be possible because the FCA does not authorise them. 

Borrowing loans or dealing with lenders not authorised by the FCA could result in financial fraud. 

Building Credit History with No Guarantor Loans 

When you borrow a no-guarantor loan, ensure you make all the repayments as agreed with the lender. Making timely repayments will help you build a reliable credit history by boosting your credit score. 

However, remember that your credit score will be impacted if you fail to manage the repayments. 

There are other options for borrowing money if you do not wish to borrow a no-guarantor loan. Let us delve deeper into each of these loan types. 

Secured Loans 

Secured loans require collateral or asset against which you will borrow money. These interest rates are generally lower than unsecured personal loans as collateral is involved. 

If you fail to repay the loan, the lender will sell your property or asset to recover the remaining debt you owe them. That means borrowing a secured loan could be financially disastrous if you fail to manage it responsibly. 

Credit Cards 

Another way to borrow money is by using a credit card. You can use credit cards rather than borrowing a no-guarantor loan. There are 0% interest credit cards that you may use. However, the introductory offer of 0% interest is only for the first few months. Once the offer expires, the credit card will charge the interest rate per their guidelines. 

Bank Overdraft 

You can ask your bank to provide you with an overdraft. It allows you to borrow more money than what is available in your bank account. It usually comes with a fee.

It is a short-term borrowing, and interest on the loan is charged with a single APR. The interest rate you will be charged depends on the bank or the building society you are borrowing the loan from. 

Borrowing from Friends and Family 

Another loan option is to ask your friends and family to help you financially. However, this may strain your relationship with them if you do not pay them as per your promise.

Borrowing a loan responsibly will help you build a reliable credit history. You can borrow a loan with no guarantor and repay it on time to improve your credit score significantly. 

Let us learn in detail how to borrow a loan responsibly. 

Assessing Affordability Before Applying for a No Guarantor Loan 

You must understand your loan repayment capability before you apply for a no-guarantor loan. Assess your income and expenses to determine the amount you are left with each month. Calculate the monthly instalment amount you must pay for the amount you plan to borrow. 

It will give you an idea of how much you must pay monthly and if you have the room for that much money for repayment. 

Budgeting and Financial Planning for Loan Repayment 

Before borrowing a loan, you must prepare a budget and plan for your finances. You add to your financial responsibilities when you take out money and have to pay it back. Your finances may take a hit if you do not have a budget. 

Create a monthly budget by eliminating unnecessary expenses to pay off the loan easily. Also, having a budget ensures you stay on track with your finances. 

Avoiding Excessive Borrowing and Loan Dependency 

Determine the amount you need to borrow and apply for a no-guarantor loan. If you have a good credit score, lenders may offer you a loan amount higher than the amount you have applied for. 

However, it will be wise if you do not borrow an amount you do not need. Borrowing more money means paying more in interest. It may lead to a debt trap if you fail to manage the repayments. 

Also, reduce your loan dependency by relying on your savings or emergency funds. Take some portion out of your emergency pot and apply for a loan for the remaining amount you need. 

Repayment Strategies to Avoid Falling into a Debt Trap 

Create strategies to stay aligned with your repayments. When you make the repayments on time, you avoid the debt trap. If you fail to repay, a late payment fee will be levied. If you miss the repayments, the loan amount will pile up, ending in a debt trap. 

To avoid that, keep checking your budget and how well you are progressing with it. Review your spending patterns from time to time and make changes to them if necessary. 

It is important to compare quotes from lenders offering no guarantor loans. Comparing quotes from multiple lenders will help you choose the right offer, as the interest rates and APRs may vary from one lender to another. The lesser the APR, the more you will save interest in the long run. 

With LoanTube, comparing multiple quotes from various lenders is very easy. 

• Fill in the application form and submit it online. We will assess your loan profile and offer you quotes per the personal and financial information shared by you in the application form. 
• In a minute, we will display multiple offers from our partner lenders. 
• Choose one offer, and if you agree with the terms of that offer, the lender will transfer money into your account.
• Depending on your typing speed, this happens within a few minutes of applying for a loan with us. 

Borrowing a loan makes it easy to manage your expenses if you run short of money. However, from financial scams to hidden fees, there are a few associated risks of borrowing a loan that you must know before applying for a no-guarantor loan. 

Understanding the Risks Associated with No Guarantor Loans

When you borrow a loan without a guarantor, you sign an agreement with the lender to repay the loan as per the terms and conditions. If you fail to repay the loan on time, the lender will charge you a late payment fee. 

In addition to that, your credit score will take a hit when you fail to meet the repayments on time and regularly. 

Further, if you continue to miss the repayments, you may be issued a County Court Judgement (CCJ), which will stay on your report for years. Also, a CCJ will impact your borrowing in the future, as lenders can see it on your report. They may consider you a risk, and the interest rate will be too high for any credit product you apply for. Lenders may turn down your application completely. 

Hidden fees to be Aware of in a No Guarantor Loan 

Ensure you thoroughly review the fine print before you sign the no-guarantor loan. Lenders may charge you additional fees, or there may be some that they haven’t disclosed to you verbally. 

Hence, knowing every agreement’s terms and conditions is essential before entering it. 

Avoiding Predatory Lenders and Scams 

Beware of lenders who offer you no credit check, no guarantor loan, or offers that may seem too good. Check the credibility of such lenders by their authorisation of being an FCA-registered lending company. 

You may become a victim of financial fraud if you deal with any lender, broker or financial institution not authorised by the FCA to conduct business in the UK.