When you apply for any loan, be it a personal loan or an auto loan, there are lots of formalities in the process. Lending institutions ask for several documents in the likes of income proof, residential status proof, financial statements if you’re a firm. They check the repayment history of the borrower and check their credit score. The loan application is outrightly rejected if this score is substandard.
In most cases, when the loan amount is high, these institutions ask you to produce a guarantor who will take your responsibility of repayment, if you default. The conventional banking institutions will charge exorbitant interest rates (APR) even if they approve your loan since neither you have a decent credit history nor you have a guarantor. All this is done as the number of financial frauds in the UK has been increasing at an unprecedented pace. This is the prime reason behind conventional banks being reluctant in lending to subprime borrowers having no guarantors.
What if we tell you that you can circumvent the tedious process of loan application explained above? Yes, there are several options of no guarantor loans for bad credit borrowers available in the UK. These loans are specially designed for borrowers who have no guarantor and have a terrible loan repayment history. The business model of these modern lenders revolves around catering to this segment of borrowers where risk is high. These lenders leverage technology and use algorithms to assess your relevant data instead of just credit history.
Some of the pertinent features of no guarantor loans are listed below:
The steps involved in the loan application for these loans are mostly online, which starts with filling a small application form with all the details. It means you don’t have to compromise your office work and visit their office. You can submit your loan application in less than 5 minutes. They will assess your need, verify your details and gives you an instant decision. If they approve your application, they will send their quote having all the details of the loan.
Now, it’s your job to read all the terms and conditions of the loan agreement they shared. Question them wherever you have the slightest of doubt and get it cleared beforehand. Make sure to be 100% sure before taking a loan to avoid any surprises later. This is because you are solely responsible for the loan you are applying for. Now that your loan is approved and it is time to pay monthly instalments, pay the repayment on time to avoid additional interest and further exacerbation of your credit score.
Now don’t let your low credit score and absence of any guarantor act as a barrier in finding the right loan for you. Prefer leveraging the option of loan lenders which are offering no guarantor loans for a bad credit history of borrowers. Nothing is stopping you now from buying something you have dreamt of, with this loan category.