Applying for a loan is a worrying thing to do if you are a person who has suffered in the past from bad credit scores and suspect financial activity that has left you in a lot of debt and no savings. As we move forward in life, many people naturally begin to move away from bad credit, but there is a big chance that for many people they are rejected by traditional lenders for quite some time due to this adverse credit history. This is where borrowing money online in the UK can become a bit easier, with a range of lenders offering no guarantor loans to help people out of a tricky situation.
Before looking at the benefits of no guarantor loans and borrowing money online in the UK in this way, it is best to understand what a guarantor actually is. A guarantor is a person who agrees to sign on to a loan application on the behalf of a person who would otherwise be unable to apply for it (as they would be rejected for not meeting the eligibility criteria). The guarantor is therefore the person who is legally responsible for making any repayments in the event of the borrower being in a position where they are unable to. A guarantor must be over 18 and under the age of 75, have a good credit history that would make them a successful candidate for the same loan, and in some cases, they must also own their own home.
There is a lot of pressure for a person to ask someone to be a guarantor. For many people, there is no one they would feel comfortable asking, or no on in their life that they could realistically ask to be a guarantor on a loan application. This is where a no guarantor loan in the UK becomes attractive.
It is a loan without the requirement for a third-party signatory. A no guarantor loan is riskier for a lender, but it opens up the market for those with a genuine need for a cash loan, and a genuine desire to pay back a loan without the need of a guarantor to prop up the application. It can be demeaning to be in a position where you are rejected from loan applications due to historically bad credit, and frustrating when you know that you have the means to pay back a no guarantor loan and help build a positive credit score in the process.
No guarantor loans in the UK are more popular than ever. They have provided a much-needed boost to people who have previously felt isolated from the market and unable to find a foothold due to a poor credit history. If you have the income to be able to pay back a loan of any kind, and you are showing willingness to get yourself out of bad credit, why should you be punished indefinitely? As with any type of loan, if you get into the habit of making your repayments on time, and never miss a payment, it will have a positive impact on your credit score over time. You should also ensure that your credit file is accurate and up-to-date, as this can have an impact on your credit rating.
