To approve a loan, banks or lenders generally demand either a good credit score or a reliable guarantor, who can be accountable for the repayment in case of default. If you do not fit in either category, then applying a loan from direct lender can be your one-stop solution. You can choose from multiple alternatives available for loans for bad credit with no guarantor in the UK under both, secured and unsecured divisions with their individual merits and demerits.
1. Secured Loans
In the secured loan, the borrower has to pledge collateral, which can be in the form of gold or property or vehicle. Depending on the collateral, the loan amount can be as high as up to 70% of its valuation. In secured loans, if the borrower is unable to repay the money, the lenders have the legal rights to confiscate the collateral and use it to get their funds back. This minimizes the risk for the lender. Therefore, the interest rate for secured loans is also moderate.
2. Unsecured Loans
To apply for unsecured loans with bad credit history and without any guarantor, one has to give a proof of steady income. One can include a benefit scheme, bank transactions and the most preferred employment from a reputed organisation. If you have a good credit score, the loan amount that can be approved can be as high as up to 90% of your salary, however, for bad credit, lenders can grant you up to 70%. Furthermore, since there is a high risk for the lender, the interest rate charged on unsecured loans is unattractively high.
Advantages of Applying for these loans
Although there can be some complications while approving loans for bad credits and no guarantor, still, the direct lender can ensure that every applicant satisfying the basic eligibility criterion gets guaranteed loans. Being a direct online lender, they cut short the loan documentation procedure to the minimum, thereby releasing the credit into your registered account within 24 hours. Also, if you are unable to pay back the amount within the due time, you would be penalized for the same but it may or may not affect your credit score depending upon the agreed terms of the loan.
Because of the diverse options available, borrowers can apply for the loan even if they are unemployed and need loans for any purpose. All the transactions are completed through secured portals and the company ensures that every credit information is kept highly confidential, and in any case, is not distributed to any third party. Depending upon one’s financial capability, the direct lenders can disperse amount from £500 to £50,000 with zero prepayment penalty options in several cases making them one of the highly regarded and trusted leaders in the lending market.
So, if you want to get loans for bad credit no guarantor in the UK, you can approach the direct lenders through call, email, or their online application form, and get competitive interest rates for all types of loans today!