No Guarantor Loans for Bad Credit

Our guide to no guarantor loans in the UK

What is a no guarantor loan?

A no guarantor loan is a loan that you can take out without the lender requiring that you have a guarantor who would agree to repay the loan if you can’t. Without a guarantor, you are solely responsible for the repayment of the loan and will bear the consequences yourself if you don’t keep up with the loan repayments.

You can use a no guarantor loan for a variety of purposes, including buying a new car, paying for a holiday or special occasion, covering emergency expenses, or consolidating debt, for example.

The opposite of a no guarantor loan is a guarantor loan.

Can I get a loan without a guarantor?

There are several types of loans you can get without a guarantor, including secured and unsecured loans. If you take out a loan without a guarantor, you alone will be responsible for making the payments and paying off the loan in full.

Can I get a no guarantor loan with bad credit?

It might be possible to get a loan with no guarantor when you have a bad credit score, but it’s normally trickier than if your credit was good.

When you have bad credit, lenders worry that you can’t be fully relied upon to pay back what you owe when you should. Because of this, you might find fewer lenders are willing to offer you a loan. It’s also the reason why loans for bad credit tend to have higher interest rates, and even more so if you have no guarantor.

If you’re willing and able to put forward something of value that you own as collateral against what you borrow, secured loans for bad credit will generally offer lower interest rates in comparison. On the downside, you could lose that asset to your lender if you fail to make your loan repayments when you should.

The best way to find out if you can get a no guarantor loan with bad credit is to check your eligibility through our partner Monevo.

Types of no guarantor loans

• Unsecured loans: Also called personal loans, these loans don’t require a guarantor or an asset as security. How much you’re allowed to borrow will depend on a number of factors including your credit score and the repayments you can afford to make.
• Secured loans: As the name suggests, secured loans require that you offer some form of security or collateral – perhaps your home or car – in order to get the loan, but you don’t necessarily need a guarantor. These loans will generally have lower interest rates than personal loans, but you risk losing the asset you put forward to your lender if you don’t keep up with your repayments.
• Payday loans: Payday loans are a type of short-term, unsecured loan that don’t require a guarantor. They are often presented as an option if you have bad credit, but they tend to have much higher rates of interest than other loans. Because of this, it’s always best to explore the risks of, and alternatives to, a payday loan before taking one out.

Pros and cons of no guarantor loans

There are certain advantages that no guarantor loans can offer in the right circumstances, but some important drawbacks to be aware of too.

Pros

• You don’t need to find and ask another person to be your guarantor, or worry that they might one day have to pay off your loan.
• There are usually more no guarantor loan options available than if you’re borrowing with the backing of a guarantor.
• Applying for a no guarantor loan and getting your funds could be quicker and easier than with a guarantor, which would necessitate additional checks and legal arrangements.
• They can offer a straightforward and fast way to raise funds, sometimes on the same day that you apply.
• You don’t have to use your house or another asset as security against the loan if it’s unsecured.

Cons

• No guarantor loans will generally come with higher interest rates than if you have a guarantor, particularly if you have bad credit.
• Not having a guarantor might make lenders reluctant to lend you larger amounts, and even more so if you have poor credit.
• Paying the loan back is your responsibility alone, and could see you lose your home or car if they are used as collateral against a secured loan and you can’t make your repayments.
• If you have poor credit, not having a guarantor might make it more difficult to get accepted for a loan.
• The number of lenders willing to offer no guarantor loans if you have bad credit is smaller than if your credit is more favourable.

How to apply for a no guarantor loan with bad credit

Applying for a no guarantor loan with bad credit online can be relatively straightforward.

As part of the application process, you’ll usually need to confirm some information, including:

• how much you want to borrow
• how long you want to borrow for
• how you intend to use the funds

You’ll also need to share certain personal details, such as your:

• name and address history
• income and outgoings
• employment status

Depending on the lender, there could be other questions you’ll need to answer. You’ll need your bank details to hand too, so the funds can be transferred if you get approval.

Once you’ve submitted your application, a lender will work out whether the loan you want is affordable for you and run a credit check. If you’re approved for the loan and you accept, the money will be transferred into your bank account.

Requirements

In order to get a bad credit no guarantor loan you’ll generally need to:

• be at least 18 years old
• be a UK resident and have a bank account.

You will also need to have some form of stable income to show the lender that you can afford to repay the loan. While most lenders will require that you have a job, some might be willing to consider applicants that are in receipt of benefits or have other income streams.

Am I guaranteed to be approved?

There is no guarantee that you’ll be approved for a loan without a guarantor. You might be rejected if the lender thinks you can’t afford to repay the loan, your credit score isn’t good enough, you have too much existing debt, or there are other elements of its eligibility criteria that you don’t meet.

Can I get a no guarantor loan without a credit check?

No, a full credit check will always be required before you can get a loan without a guarantor.

Lenders are able to check your eligibility for a loan and give you an indication of the interest rate you might pay on the basis of a soft credit check, which won’t affect your credit score.

However, if you wish to make a formal application, a lender must carry out a hard credit check, which could alter your credit score, is recorded on your credit report, and will be visible to other lenders.

What if my application is rejected?

Depending on the reason you’re rejected, you might need to spend time trying to improve your credit score or your financial situation as a whole. It might also be worth approaching a different lender which could have different eligibility criteria and lending requirements.

You can also explore other lending options to see if they could be more suitable for your situation.

However, be careful about how often you apply for credit. Credit applications leave a mark on your credit history, and too many in a short period of time could affect your score.

How could I improve my chances of approval?

You could help your chances of getting accepted for a loan in a number of ways, such as:

• Improving your credit score: A better credit score could allow you to access a wider range of loan products and more competitive interest rates.
• Reducing your debt-to-income ratio: Your debt-to-income ratio is the proportion of your income that goes towards paying off debt. The smaller this number, the more likely it is that a lender will think you could afford a loan.
• Consider a secured loan: Providing a lender with some form of security, such as your house, could help your chances of approval. This reduces the risk for the lender, but you could lose the item put forward as security if you fall behind on repayments.
• Apply with a guarantor: A guarantor would agree to repay the loan if you are unable to, which could increase the likelihood of you being accepted for a loan. You can check your eligibility for a guarantor loan here.

No Guarantor Loans FAQs