No Guarantor Loans

Money is essential to survive. Everything in life is dependent on money. Given the economic climate of United Kingdom and the entire world, people find it very difficult to manage their finances. The money they earn every month falls short of their expenses. People often find themselves trapped in financial crunch. Sudden unavoidable expenses come up that must be funded immediately. Going for conventional secured loans is not really a good idea because though they have low interest rates, they generally take a very long time to process the application and the lenders do not really approve all applications. On the contrary, the urgent requirements that show up cannot really wait that long. This is where the no guarantor loans actually fit in. These loans are unsecured loans and they come with some unique features that put them into a different class of loan products.

No guarantor

As the name suggests, no guarantor loans do not require any guarantor. The person applying for these loans can take out the loan on their own. The lenders will not ask the borrower to bring someone who can guarantee the repayment in case the borrower fails. So the question that comes up is, ‘why will the lender take this risk and is there actually no guarantor?’

It is the job that guarantees repayment of the loan

In order to qualify for the no guarantor loans, the borrowers need to have permanent jobs with fixed monthly salary. The job of a borrower becomes the repayment guarantee. However, it has to be remembered that no guarantor loans are also available for those who are unemployed or those who are in business. These variations of the no guarantor loans have different set of requirements but still, the overall concept remains the same. In case of unemployed people, for example, the lenders will come up with a repayment plan that can be realistically achieved by the unemployed people. The monthly installments will be reduced and the repayment period will be increased.

What are the requirements for these loans?

For any person to qualify for the no guarantor loans (whether employed, unemployed, on benefit or in business), he or she must be at least 18 years or age and must be a citizen of United Kingdom. The person also needs to have an active and authentic saving account with any bank. If, any one among these three conditions is not met, the person will not be able to get a no guarantor loan. For those who are employed, the lenders will ask for employment documents and pay slips. Failure to provide that will mean that the applications will not approved by the lenders.

Will the lenders conduct credit checks?

No, most of the lenders offer the no guarantor loans without running any credit checks. Because no credit checks are conducted, those who have past records of arrears, CCJs, late payments, bankruptcy etc. can also apply for these loans. Because the lenders decide to bypass the credit checks, the processing of the applications also become fast. There is another thing that must be noted. When the creditors decide to bypass the credit checks, they actually take a risk as they don’t know whether the person taking out a loan will actually repay it or not. To compensate of this high risk, the lenders increase the interest rates.

What amount of money is lent and what are the interest rates?

The amount of money approved for any no guarantor loan ranges within £100 and £1000. The no guarantor loans are unsecured loans and in UK, these loans are not regulated by any governing body. The lenders are actually free to charge whatever interest rate they want. The rates of interest for these loans are very high. However, because of cut throat competition, the lenders try to trump each other by lowering their rates. This allows the borrowers to enjoy competitive rates. No matter what, the interest rates for these loans will always be higher than the interest charged on conventional secured loan products.

Are these loans same as payday loans?

Yes,no guarantor loans are often referred to as payday loans and the lenders process the applications and then disburse the loan money within 24 hours. Sometimes, the lenders can actually credit the money to the borrowers’ bank account numbers with a few hours. For payday loans, the borrowers need to repay the loan amount to the lender when they receive their next pay check. This is actually applicable for those who are employed with a fixed monthly salary. For others like unemployed or on benefit people, the repayment schedule can be customized.

Are there any fees and charges?

There are absolutely not hidden fees. The interest rates are clearly mentioned during the application phase that is what is charged by the lenders. There are prepayment penalties as well. However, in case the borrower fails to repay within the specified time, there will be late charges applicable.

Application process and paperwork

Lenders know the importance of time especially when people are looking for cash help to deal with some immediate and unavoidable expenses. It is because of this, the application process has been simplified. A person can apply for the no guarantor loans using the online application form. The paperwork has also been reduced significantly. There are some lenders who have eliminated the paperwork completely. This allows quick processing of the loan applications and as soon as the applications are approved, the lender wires the money to the borrower’s bank account. The entire process can take only a couple of hours.

Cash usage policy

There are absolutely no restrictions on how a person uses the cash advances from the no guarantor loan. He or she can actually use it to cover some instant cash requirements like paying bills, paying rent, home improvement, college fees etc. The lenders will not track the expense. Any borrower must however, make sure that the money is used properly and is not wasted for reasons that are cosmetic or useless in nature.