There are situations when a lender would like you to arrange a guarantor with a good credit history. In particular, this scenario comes into the picture when your credit report is not up to snuff. When a guarantor enters into a contract with you, it whittles down the risk of the lender, as your guarantor will be called upon when you make a default.
Having someone who assents to act as a guarantor is anything but possible. If you make a default, the credit rating of your guarantor will also be affected. Nobody would ever like to act as a guarantor when they know your default will take a toll on their credit rating as well.
Your credit score is not stellar, and you cannot get a loan signed off on without a guarantor. Arranging a guarantor is not possible because nobody would risk their credit score. Does that mean that you cannot get a loan without a guarantor if your credit history is not stellar?
No, not at all. Getting a no guarantor loan is still possible even if you have a bad credit file. However, you will have to offset the absence of a guarantor with other conditions.
Tips to get a loan without a guarantor when your credit score is too low
If you do not want to arrange a guarantor, you should try to offset the impact of your poor credit rating with the following methods:
1.  Apply with a co-applicant
A no guarantor loan is a small emergency loan. Most of the lenders will not lend you more than £1,000. A few lenders are out there that lend money up to £5,000. If you borrow a small sum, a lender will not bother about arranging a guarantor or signing up with a co-applicant, but when you are borrowing a more considerable sum, you will have to meet their condition.
A co-applicant will be a co-borrower. It means it will be a joint loan. Now, you both will be partly and wholly responsible for the debt. You will likely get approval from your lender when your co-applicant has a good credit score. In fact, you will get money at a lower interest rate.
Bear in mind that your lender will peruse both your credit report and income sources. Therefore, your partner should also have a good income source because they will have to assume the responsibility to pay off the entire debt. If any of you do not have a good income source, your lender will restrict the loan amount.
2. Have a strong income source
Whether or not you arrange a co-applicant, you must have a strong income source. A lender would like to assure you that you can repay the debt. Your credit score is already bad, so you can show that you will stick to payments only by having a strong income source. When you have sufficient income sources, this improves your chances of getting instant approval for no guarantor loans with bad credit from a direct lender.
3. Choose a lower loan amount
It is likely that your income is not sufficient to secure the borrowing sum you want. In this case, you should try to reduce your borrowing amount. When you lower the sum, it reduces the risk of the lender, and as a result, you will get approval for the loan without any hassle.
Try to borrow the money that you need. Even if your budget allows, you should never borrow more than you need. You do not have to do it when you are applying with a co-applicant who has a substantial income.
4.  Seek alternative lenders
A couple of lenders are out there who emphasise your credit rating, but some lenders check your affordability based on other factors as well. They will peruse your credit report, but they would like to see how old the missed payments and defaults are, how many inquiries show up on your credit file and whether they are the latest.
Your credit report will not get in your way if the inquiries are too old. If your credit report does not show too many late payments, it will not affect much of your ability to borrow money at a lower interest rate.
What are the types of no guarantor loans?
No guarantor loans are small loans that people, in particular, take out to meet unforeseen expenses. The lending amount of these loans is not so immense, and it varies by lender. A no guarantor loan is a broader term. It includes various types of small loans that do not require a guarantor at all.
1. Payday loans
Payday loans do not require a guarantor. The maximum amount you can borrow is up to £700. A few lenders can lend you up to £1,000, but in rare cases. These loans are small emergency loans and are paid back in full on the due date. Lenders do not lend a hefty sum because the repayment length is hardly more than 14 days.
2.  Same day loans
Same-day loans are also a type of no guarantor loan. They are also small emergency loans. You can get them approved the same day you put in the loan application. If you need money too urgently, these loans are worthwhile. Same-day loans are also paid back in full on the due date, but a few lenders may allow you to pay down in weekly installments.
3.  Personal loans
When you apply for a payday loan and same-day loan, you do not need to arrange a guarantor as the amount is so small. A lender will lend you money based on your income sources.
However, when you take out a personal loan, the loan size is big, so the lender will require you to arrange a guarantor with a good credit score. Still, you can dodge this requirement by arranging a co-applicant and following the other aforementioned steps.
The best part about personal loans is that you can borrow a larger sum as compared to payday loans and same-day loans.
4.  Bad credit loans
Bad credit loans are also a type of no guarantor loan. Not all personal loan lenders will approve your application when your credit score is not so stellar, so you do not have many options in the market. But there are some direct lenders that will let you apply for bad credit loans.
You will get money at the most competitive interest rates despite a bad credit rating. As such lenders are proliferating on the market, you can easily compare their interest rates. This will help you choose the best deal.
The bottom line
It is possible to get a no guarantor loan when your credit rating is not so good at all. If you are borrowing a smaller sum, you will undoubtedly be able to get the nod, but if you need a larger sum, you should have to arrange a co-applicant with a good credit history.
If that is not possible, you should try to offset the impact of poor credit history by improving your income and borrowing a smaller sum.
