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loans without guarantor
loans without guarantor

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Getting a Loan Without a Guarantor: What You Should Know

Curious about loans that don’t require a guarantor? We unpack the benefits, risks and eligibility requirements of this popular type of borrowing.
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If you’ve been looking for a loan, you’ve probably come across a vast array of loan types, which may be making your search even more challenging. 

One such type of loan is no guarantor loans. Usually, these types of online loans can often come with high interest rates, and you may be eligible for one even if you have a poor credit history.

As with any loan, it’s vital to always do your research before you commit to borrowing from a lender. To help make your search a little easier, we explore what loans with no guarantor mean and what options might be available to you.

What are no guarantor loans?

Sometimes, depending on your circumstances – usually if you have bad credit – a lender may ask you to provide a guarantor. This is typically someone you know, like a family member or a friend, who has a good credit rating and agrees to pay off your debt should you become unable to make the repayments. It is important to understand that until the loan is paid in full, the loan will be viewed as a joint debt, so you and the guarantor will be liable. It can also affect the guarantor's credit rating.  

When it comes to no guarantor loans, these can be any type of secured or unsecured personal loan that doesn’t need a guarantor whether you have bad credit or not. 

It’s worth bearing in mind at this point, that while you might find some lenders that offer loans for bad credit without a guarantor, these will very likely have high interest rates attached and strict repayment terms, so think carefully before making any commitment. You must feel comfortable making – and maintaining – the repayments, to pay off the debt in full. 

What’s the difference between secured loans and no guarantor loans?

Secured loans typically require an asset (or collateral) that you own, such as property or a car, for example, to back them up. This is so that lenders have a way of getting their money back if you stop making your loan repayments.  If you’re considering taking out a secured loan, the amount you can borrow can vary significantly, as it can depend on what your asset is worth. You might want a modest £1,000 loan, for example, or a much larger sum, but remember that the options available to you will also rely on your creditworthiness and the lender’s policies.   On the flipside, an unsecured no guarantor loan won't require you to provide an asset that you own, however, your borrowing options will likely become more limited, and the interest rates will be much higher.

The pros and cons of loans without a guarantor  

For some of us, having a suitable guarantor isn’t always possible and it may be an option you don’t even want to consider. Therefore, it’s crucial that you weigh up the advantages and disadvantages of taking out a loan without a guarantor.  

The pros 

  • You won’t need to find a guarantor in the first place, meaning you can avoid potential awkward conversations with loved ones or putting any strain on close relationships, should you become unable to make the repayments. 

  • Your application may be processed faster, giving you access to funds more quickly. Without a second party involved, lenders will only have to check your own creditworthiness, thus reducing the time it takes to give you the money. 

  • You can start building up your credit score, if you make the repayments on time and in full. This can be a good way to show lenders that you are a reliable borrower if you wish to take out a loan in future. 

The cons 

  • If you have a poor credit history, your loan options and how much you can borrow will be limited, and the loans available to you are likely to come with high interest rates. 

  • You are solely responsible for the loan, which means you won’t have a fallback should you become unable to keep up with your repayments and fall into bigger debt. 

  • If you take out a secured loan, by not making your repayments on time and in full, you could risk losing your assets (i.e. your home) and damage your credit score.

Can I get a no guarantor loan with bad credit? 

can i get a no guarantor loan with bad credit?

There are lenders that offer no guarantor loans, if you have a poor credit score, but you’ll likely have fewer options to choose from. These might include non-traditional high street lenders such as online banks or loan companies.   

As loans for bad credit and no guarantor reflect an increased risk to the lender, they often come with higher interest rates from the off. A lender will also look at your credit history and, for example, evidence of consistent bill payments, stable income sources and whether you’ve managed credit effectively in the past. They’ll also assess your monthly outgoings and income. 

Some lenders will conduct a soft credit check initially, too, which won't impact your credit score, but will help determine your eligibility before analysing your creditworthiness in more detail. At this stage, a lender can also decide on the value of the loan, too. As every lender is different, it’s vital that you understand their specific requirements, and it’s certainly worth bearing in mind that meeting these criteria doesn’t necessarily guarantee that your loan will be approved. 

Is getting a loan without a guarantor right for me? 

We can't stress enough how important it is to do your research when you’re considering any type of loan, be it with or without a guarantor.  

Always ask yourself if you really need a loan in the first place, and how else you may be able to access the money, safely and affordably. If time allows, could you save up instead, for example? Is borrowing money from a friend or loved one possible? This option can come with its own risks, so drawing up an agreement is always advisable, if this is a route you’re considering. Other risky options are loan sharks and doorstep loans, which you should avoid. 

When researching loan options, make sure that you carefully assess each lender’s loan terms, including the interest rate, repayment period and any additional fees or penalties associated with late or missed payments. Some may offer flexible repayment terms, which you may find beneficial if you’re self-employed with a fluctuating income, for example. 

Importantly, only borrow what is necessary and what you can comfortably repay - borrowing more than you need or can afford can lead to further financial strain and see your debt spiral. 

Does Creditspring provide no guarantor loans? 

Yes, we do. As a subscription finance lender, our range of no-interest loans (APR Rep 83.1%, fees apply) vary from between £400 and £2400 and can be accessed by our members for a low fixed monthly fee. 

Our loans are unsecured and available to UK residents aged 18 or over with a regular income, and no recent CCJs, IVAs or bankruptcies*. You can check your eligibility to see if you qualify in less than a minute. 

*This list is not extensive and Creditspring membership is subject to status. Terms and conditions apply.  


What if I default on a loan without a guarantor?

If you have a loan and are finding it difficult to make your next repayments, always tell your lender as quickly as possible. They may be able to come up with an alternative, temporary repayment plan while you get back on track, but be mindful that this may incur a penalty charge.  

If you default on a loan without communicating with your lender and have no guarantor, your lender will take steps to regain the money you’ve borrowed. This could be in the form of taking legal action against you to recover the debt or seizing any assets secured on the loan, such as your home. It’s therefore crucial that you contact your lender to explore what possible solutions might be available to you. 

Do loans without a guarantor have higher interest rates?

They can do, especially if you have a bad credit rating, too. The absence of a guarantor increases the lender's risk, and this is often offset by the lender charging a higher interest rate. It’s therefore really important to compare different loan offers and their terms to find the best option for you. 

Can I get a loan without a guarantor if I have a poor credit history?

It is possible to secure a loan without a guarantor even with a poor credit history. Lenders specialising in bad credit loans assess other factors like income stability and current financial standing. While these loans are accessible, they often come with higher interest rates and may require a soft credit check as part of the application process. 

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