The financial market of the UK has a lot to offer to the British public and they are actually getting many advantages from the products and service offered by FinTech companies.
Loans without guarantor are among one of the products provided by them. These are small duration loans, which provide the opportunities of accessing the desired fund without anyone to back during the loan agreement.
Earlier the funding methods were very traditional where too much red-tapism was involved from multiple visits to lender’s office to filling of hundreds of papers. Applications with the signature of guarantor were highly respected but the situation was entirely opposite in case of no guarantor.
Today the world has become advanced due to the arrival of technology and so does the financial market. The online application process has given rise to more funding options even though the borrowers have no friends or relatives to sign their loan agreement as a co-signer.
Here in this article, we are going to discuss what this loan is all about. Our focus will be to make you familiar with the benefits and demerits of the loans so that you can understand properly before applying.
The ‘Significance’ of No Guarantor Loans
You can ask that the market is flooded with plenty of short term loans available for borrowers. Why does only this loan one need to take?
Your point is actually very correct but you are not the only person who has this question. Many borrowers have raised the same concern over the period of time.
Traditional lenders prefer those borrowers for lending who have a good credit score. They don’t show a willingness to offer loans if you have a bad credit score. Hence, in this situation, online lenders or direct lenders prove handy.
The fact is that getting a specialised loan is not just an obligation but also is the need of the hour. You don’t have anyone to co-sign your loan while signing the loan agreement which may hamper your funding opportunity. In this situation, you have to find an alternative source of getting the fund. These loans for bad credit with no guarantor prove helpful in this situation.
Finding the co-signer is not necessary and application can be submitted directly to the lenders through online mode.
When it comes to the need of fund during an emergency situation, don’t just look for early approval of your loan application. Lenders do complete justice with the online applicants and give approval to your loan application within 24 hours.
As discussed earlier, people with poor credit score can also avail this type of loans if their need is for short term, not for the long term.
The ‘Consequence’ of No Guarantor Loan
There are always two points of views of everything and thus the discussion should also be on the other part i.e. consequences.
The primary worry for the borrowers is the high-interest rate. Many borrowers feel that they are getting charged very high compared to other loans like long term loans, or business loans etc. But the point they should consider here is that they are getting the loan without any co-signer and despite the bad credit. So, the high rate should not be a problem here as long as you’re getting the fund immediately.
It is a blessing in disguise that lenders are providing you with the loan without any restrictions but remember that you can’t take a long duration loan for the need which requires a small amount.
In some occurrences, the lender might ask you for collateral to secure his fund. And it will be mandatory to arrange the collateral. One benefit of this is that you don’t have to pay a high rate of interest.
In conclusion, we can say that everything has pro and cons. And it’s completely your right to make a decision in this regard. If your need is for a small amount and no one is there to sign your loan agreement then definitely you should go for no guarantor loan. Always keep in mind to borrow as per your need and never forget repayment on time. Making repayment on time will improve your credit score which will be helpful in future loan sanctioning.