When your credit scores are not up to the mark, getting a loan is not going to be easy. You are a potential threat to many lenders, but not all. Thus, you must research and analyse the chances of getting a breakthrough.
When you lack perfect credit scores, you must compensate for the risk caused by this with something else. Here, a guarantor can come into play, as their responsibility is to support the loan payments on your behalf. This factor can make up for what has been lacking in your financial profile.
With that, the lender might not see any problem in giving you a nod of approval. What if you are not able to find someone who can become your guarantor? In that case, it is obvious that you have zero chance of getting the attention of the lender.
Such denials are, of course, a source of disappointment, but you should not give up. This is because you can even get very bad credit loans with no guarantor claim from a direct lender. Now, this is not going to be as straightforward as it may seem, but a detailed analysis can help you understand the pertaining conditions.
Maybe the lender would ask for collateral to offer loans when you have very low credit scores. On the other hand, they might insist on increasing the interest rates. Study and find out which way will work best for you.
Loan with or without a guarantor, regardless of your credit scores
The credit history is a crucial element used when determining the eligibility of the borrower. Lenders cannot overlook this aspect completely, but can definitely find other ways to re-confirm your financial stability. This has given birth to an alternate solution i.e. loans without a guarantor even when your credit scores are not perfect.
1. Impact of credit scores while getting loans with a guarantor
When you opt for this way, you can relax as lenders should not have any problems. However, there are a few specifications you must fulfil regarding this guarantor factor. You cannot choose any random person as your guarantor.
- That person should have favourable credit scores
- They should show a stable earning status
- A guarantor should be doing a steady job
- Their financial condition should be such that they can meet the repaying conditions
Usually, anyone from your family and within the friend’s circle can accept this role. Besides, your colleague or any other person you know very well can qualify to become a guarantor. You should have 100% faith in them when it comes to timely payment of loans.
The various ways you can get benefitted by arranging a guarantor especially when you are dealing with poor credit scores.
§ Better rates
The rate of interest will be reasonable as the lender will perceive less risk in offering you help. Lower rates can remarkably downsize the overall cost of borrowing. By providing a guarantor, you are providing an assurance for on-time payment of loans.
§ Easy approval
With inclusion of that one factor, the lender can fast-pace the approval process. They do not feel the need to confirm other aspects of your financial life. Thus, a lot of time is saved and you can expect a response ahead of time.
§ Flexible repayment terms
Repayment conditions might not be very strict. You can pay back flexibly at your convenience. Thus, loan payments are not going to be burdensome for you.
2. Impact of credit scores while getting loans without a guarantor
Obviously, when your credit scores are unfavourable, the lender will ask for some avenues to make sure about repayments. A guarantor is one such way to confirm that you will repay. Thus, when you step back from providing this assurance, you will get the least attention.
However, you do not have to be worried as there are online lenders. They prioritise affordability over credit scores. If you are able to prove your affordability, there is no looking back.
Then, the loan provider will not bother you with a guarantor condition. Some of the pointers you must note while getting loans without a guarantor despite low credit scores.
§ Smaller borrowing range
The lender will decide the upper and lower borrowing extent. When your credit scores are not perfect, you should not try to borrow a huge amount of money. The loan provider will offer a smaller amount of loans to dilute the risk factor.
§ No anxiety related to the guarantor
When you are asked to provide a guarantor, finding a good match is difficult. Not everyone you prefer will get ready to become your guarantor. However, you will always have that fear of that person not turning up to pay off loans on your behalf.
§ Convenient repayment pattern
As the lender will have clarity about your current financial condition, they can design a practical repayment structure. It will allow you to pay back a small amount for months. You will be free from the compulsion of repaying loans at one time.
§ Draw the comparison of loan rates online
When you apply for a loan with bad credit with a direct lender, you do not have to go through the tedious traditional procedure. You can fill out the application and send it online as well. It will hardly take a few minutes.
Besides, this will be for pre-approval of loans which will allow you to review and compare the loan cost. As you can pre-qualify with different lenders, you can collect the quotation and compare the rates. There is no need for you to pay anything extra to avail of this facility.
The bottom line
At some point, you might want to check out loan options that do not come with the compulsion of stellar credit scores. Head over to Quickloanslender, which is a reliable direct lender. They can help you get an opportunity to borrow despite poor credit scores.
The process will need them to verify your affordability, that is going to outweigh the blot in your credit history. Now, without exploring the different lending opportunities, you cannot figure out the potential opportunities. The circumstances and advantages you can enjoy will vary depending on the route you take.
Emma Anderson is a financial advisor at Quickloanslender who always believes in researching hard to know her clients’ financial problems. She takes the time to understand their financial wants and needs to write the blogs on them as the solutions. In her long 14 years of experience, she has written plenty of blogs on the financial and business sectors of the UK.
Emma Anderson has been recognised for her work in financial planning and her blogs are regularly published in the website of Quickloanslender. As far as her educational qualification is concerned, she has done Masters in Accounting and Finance, and done PG Diploma in Creative Writing.
