If you’re in a position where your credit score is less than ideal – or you simply have no credit profile at all, then you might be forced to use a guarantor. For those unaware, this is where you get a trusted friend or family member to put their name on to the loan agreement. In doing so, and you subsequently fall behind on your repayments, the guarantor would then be legally responsible to take the loan over.
With that being said, there might come a time where you need to obtain a loan and you don’t have, or choose not to use, a guarantor. As such, we have created the ultimate guide to the Best Loans Without Guarantor Providers. Within it, not only will we give you the best 3 providers currently active in the UK market, but we’ll also explain the best way to obtain a loan without a guarantor – even if your credit profile is somewhat damaged.
Table of Contents
- Borrow up to £5,000
- Apply even without a perfect credit score
- Get instant response upon application
Pros and cons of loans without guarantor
The Pros The Cons
Best 3 loans without guarantor providers: Reviewer’s choice
How do loans without guarantor work? Read our step-by-step guide
Obtaining financing with the backing of a trusted guarantor will not only increase your chances of being approved for the loan, but it will also help your chances of getting a lower rate of interest. However, if this really isn’t an option for you, we’ll give you a full breakdown of how the loan process works without a guarantor.
Step 1: Find a loan provider
You will first need to find a suitable lender that is happy to loan funds to those with bad credit, while at the same time not require a guarantor to be listed on the loan agreement. You also need to ensure that the lender is able to loan you the required funding amount, and at a rate of interest that isn’t too crippling.
As we noted above, your current circumstances are likely to lead you to conventional payday loan providers, so the APR on offer is going to be costly. Nevertheless, you can check out our top 3 loans without guarantor providers in the section below if you need further guidance.
Step 2: Start the application
Once you arrive at your chosen loan provider’s homepage, you will need to enter the [A] size of the loan that you require and [B] how long you need to pay the funds back. As you adjust the fundamentals, the lender will usually update the representative APR rate – which is based on the size and duration of your loan.
Step 3: Enter your personal and financial information
Next, you will then need to provide the loan company with your personal and financial information. As is the case with all credit products, this will include details pertaining to your identity – such as your full name, home address, date of birth, driver’s license number, and contact details. When it comes to your financial standing, the lender will initially inquire about your income. You will need to enter the name and address of your employer, how long you have worked there, how much you earn per month after tax, and the frequency at which you get paid.
You will also need to provide information about your current debt obligations. For example, if you currently have a number of outstanding loans or credit cards, not only will you need to enter the name of the underlying issuer, but also an estimation as to the size of the debt still outstanding.
Step 4: Provide your bank account and debit card numbers
Before a decision is made on your loan application, the lender will ask for your current account details. This is for two key reasons. Firstly, this will be the bank account that the loan funds are transferred in to. Secondly, the lender will be able to verify your identity via the bank account details that you provide.
You will also be asked to enter the credentials found on the front of your debit card. This needs to be the debit card that is tied to the current account details that you previously entered. Once again, this will help verify your identity. Moreover, it is likely that the lender will take your repayments directly from your debit card, as this allows them to debit the funds as soon as you get paid.
Step 5: Review the decision and sign the digital loan agreement
Once the lender has collected all of the required information from you, they will then cross-reference it with external sources. As the entire process can be achieved electronically, you should receive a decision in less than 60 seconds. In this sense, you will get one of three outcomes. The lender will either [A] approve your application [B] reject your application or [C] ask for additional documentation.
Here’s what you need to do in each potential outcome.
i) Loan Approved: If the loan was approved by the lender automatically, you will then be presented with your pre-approval rates. In layman terms, this means that the lender will let you know how much they are willing to offer you, what interest you will pay, and when you need to repay the funds. If everything looks good upon perusing through the loan agreement, you can proceed to sign the agreement electronically.
ii) Loan Rejected: If your loan without guarantor application was rejected on the spot, then this will be the end of the process. While you are free to go and try another lender, you should proceed with extreme caution. This is because executing multiple loan applications (or any credit-based product for that matter) will have a negative impact on your credit score. In fact, the main three credit bureaus will assume that you are desperate for financing, so multiple rejections in a short amount of time will see your score marked down.
iii) More Information Required: If the lender requires further information from you, this will be for one of two reasons (or potentially a combination of the two). If the lender was unable to verify the personal information that you entered on your application, then they might request a copy of your passport or driver’s license. Alternatively, if the lender requires supporting documentation regarding your income, they might ask for a recent payslip. Either way, if you satisfy the requests of the lender by uploading the required document(s), then they should be able to give you a decision fairly quickly.
Best 3 loans without guarantor providers
As we noted in the above section, the vast majority of loan types come without the requirement of a guarantor. However, if you are here searching for a loan provider that will approve your application without one, then it is likely that your credit profile is less than ideal.
With that being said, we will make the assumption that you are currently in possession of a bad credit score, and you need to find a provider that will consider such a profile without the use of a guarantor. As such, we have focused on lenders that meet this criterion.
Before you evaluate the three lenders we have chosen to recommend, be sure to read the metrics that we look for in a loan provider.
Criteria used to rank the best loans without guarantor providers
- Lenders with the most competitive APR rates
- Lenders that allow you to complete the entire application online
- Lenders that are transparent on their fees
- Lenders that consider credit profiles of all shapes and sizes
- Lenders that do not charge high late payment fees
1. Ocean Finance – Loans without guarantor of between £100 - £5,000
Ocean Finance is a really useful platform to use in the case of loans without guarantor financing, not least because they have heaps of bad credit lenders within its network. The way the site works is you enter your loan requirements - alongside your personal and financial information, and Ocean Finance will then match you with suitable providers.
As noted by the team at Ocean Finance themselves, whether or not the respective lender requires a guarantor will be dependent on the provider in question. However, when your search results do load, the Ocean Finance platform will let you know whether a guarantor is required - based on your individual creditworthiness.
As such, there is no requirement to proceed with any of the loan offers put your way. When it comes to the specifics, Ocean Finance is able to facilitate loans of between £100 and £5,000, with loan terms starting from 3 months, up to a maximum of 5 years. The specific interest rate that you pay will also depend on your credit profile, although Ocean Finance does note that the APR will start from 49.9%.
- Loans offered without guarantor of between £100 and £5,000
- Entire application completed online
- Suitable for credit profiles
- Oceanm Finance is not a direct lender
- Charges relatively high interest rates that start from 49.9% APR
2. New Horizons – Borrow between £50 - £5,000
New Horizons is a UK based platform that seeks to match bad credit profiles with suitable loan providers. Much like in the case of Ocean Finance, the platform doesn't specialize in loans without guarantors per-say, insofar that each lender will have its own policies regarding how it packages its loans.
However, once you have gone through the initial application process and your search results load, you will be able to see whether or not the respective lender requires a guarantor for approval. In terms of how much you can apply for via the New Horizons platform, this starts at a mere £50, up to a maximum of £5,000. If your credit profile has been damaged severely, then it is unlikely that you will get anywhere near the upper limit, so do bear this in mind.
Loan terms at New Horizons start from 3 months, up to a maximum of 36 months. In terms of the interest, this will depend on your creditworthiness at the time of the application. In other words, the APR will increase in direct correlation to your less than ideal credit score.
- Loans without guarantor of between £50 and £5,000
- Offers extended loan terms of between 3 months and 36 months
- New Horizons does not charge any fees
- One may consider its representative APR that starts from 49.9% high
- New Horizon is not a direct lender
3. Cash Float – Borrow between £200 - £1,100
Although third-party comparison sites like Ocean Finance and New Horizons give you a much wider pool of lenders to choose from, if you're instead looking to deal with a lender directly from the offset, then you might want to consider Cash Float.
Although the UK-based payday loan lender is tailored to those with bad credit, the key point is that they will never ask for a guarantor. As such, the decision-making process is based entirely on your personal and financial credentials. In terms of the fundamentals, Cash Float has the potential to facilitate loans of between £200 and £1,100.
However, you won't necessarily get the full amount that you apply for, as the lender will base this on your affordability levels. If you are approved for a loan with Cash Float, it is important that you have a full understanding of the underlying APR rates. The reason for this is that Cash Float is known to charge super-high interest rates, so only proceed if you have a firm grasp of how much you'll be paying back in total.
- Access loans without guarantor of between £200 and £1,100
- Complete the entire application online
- There is no guarantor required
- High APRs starting from 49.9%
- Maintains low maximum loan limits
What is a loan guarantor?
For those of you unaware, a loan guarantor is an individual that puts their name to your loan agreement. This will usually come in the form of a friend or family member, or in some cases, it could even be an employer. Either way, lenders that ask for a guarantor will do so because they are not willing to lend you the funds without one. This will be because your credit profile is somewhat damaged, or you simply have no credit profile at all. The specific role of the guarantor is simple. As long as you always make your repayments on time and thus – never fall behind, then you will continue to repay the loan until it is repaid in full.
In this example, the guarantor was not required in any way, shape, or form. However, if you were to fall behind on your repayments, then the guarantor would legally be required to cover the short-fall. This is why asking a family member or friend to put their name on your loan agreement can be an awkward one. Not only will they know how much you are looking to borrow, but they will also have a firm idea as to the health of your financial standing. Ultimately, this is likely the reason that you are looking for loans without a guarantor.
Am I eligible for a loan without a guarantor?
Once again, if you are currently in a position where you hold a healthy credit score, then you will be able to obtain a conventional loan without needing a guarantor. The only reason that lenders will ask for one is if they believe that you stand a very good chance of falling behind on your loan agreement. If this sounds like you, then not only are you looking to obtain financing with a bad credit profile, but you are looking to do so without a financial backer to guarantee the loan.
While this might sound like an uphill mountain, achieving this goal is not beyond the realms of possibility. With that being said, we have listed the main criteria that loan providers typically look for when assessing whether or not to approve your application without a guarantor.
- Credit Score: The obvious starting point for lenders will be to extract your current credit score from one of the three main bureaus. If the lender in question deems your credit score to be too low, then you might get rejected outright. This is why you are best off targetting loan providers that look at other metrics, such as your income.
- Annual Income: On top of your credit score, lenders will also need to assess your affordability levels. This will mainly centre on how much you earn from your current job, or if applicable, from benefits or a pension. Either way, if the lender stipulates a minimum income threshold, then you will need to meet this to be eligible.
- Monthly Outgoing: Following on from the above point on affordability, lenders will also ask you some questions about your monthly outgoings. This will include the amount of money that you spend on your mortgage or rent, as well as ongoing commitments such as a gym membership.
- Previous Credit: If you are to be approved for a loan without a guarantor, then you will need to display to the provider that you are going to make your repayments on time. To assess whether or not this is the case, lenders will look at your credit report to see what your historical relationship with debt is like. Most specifically, if you have a consistent history of missing payments, this will go against your chances of being approved.
- Borrow up to £5,000
- Apply even without a perfect credit score
- Get instant response upon application
Glossary of emergency loans
A credit score shows your creditworthiness. It's primarily based on how much money you owe to loan or credit card companies, if you have ever missed payments or if you have ever defaulted on a loan.
Guaranteed Approval is when, no matter how bad, your credit score its, your loan application will not get declined.
A Credit Limit is the highest amont of credit a lender will lend to the borrower.
Collateral is when you put up an item against your loan such as your house or car. These can be repossessed if you miss payments.
A Cash Advance is a short-term loan that has steep interest rates and fees.
Your Credit Rating is how likely you are to fulfill your loan payments and how risky you are as a borrower.
Fixed Interest Rate is when the interest rate of your loan will not change over the period you are paying off you loan.
The Interest is a percentage based on the amount of your loan that you pay back to the lender for using their money
If you default on your loan it means you are unable to keep up with your payments and no longer pay back your loan.
If you miss a payment the lender will charge you for being late, this is known as a late fee.
An Unsecured Personal Loan is when you have a loan based solely on your creditworthliness without using collateral.
A Secured Loan is when you put collateral such as your house or car up against the amount you're borrowing.
This is the Interest Rate used by banks for borrowers with good credit scores.
The Principal amount the borrower owes the lender, not including any interest or fees.
A Variable Rate is when the interest rate of you loan will change with inflation. Sometimes this will lower your interest rate, but other times it will increase.
An Installment Loan is a loan that is paid back bi-weekly or monthly over the period in which the loan is borrowed for.
A Bridge Loan is a short term loand that can last from 2 weeks up to 3 years dependant on lender.
Having an AAA Credit Rating is the highest rating you can have.
A Guarantor co-signs on a loan stating the borrower is able to make the payments, but if they miss any or default the Guarantor will have to pay.
LIBOR is the London Inter-Bank Offered Rate which is the benchmarker for the interest rates in London. It is an average of the estimates interest rates given by different banks based on what they feel would be the best interest rate for future loans.
Home Equity Loans is where you borrow the equity from your property and pay it back with interest and fees over an agreed time period with the lender.
Debt Consolidation is when you take out one loans to pay off all others. This leads to one monthly payment, usually with a lower interest rate.
If you obtain a Student Loan to pay your way through College then you loan is held with the Department for Education U.K.
Financial Aid in the form of grants is funding available to post-secondary education students throughout the United Kingdom and you are not required to pay grant
What is a guarantor?
A guarantor is a person that puts their name against your loan agreement. Lenders ask for this if your credit profile is less than ideal, as the guarantor will legally be required to cover your repayments if you fall behind.
Are loans without a guarantor available for those with bad credit?
If you are looking for a loan without a guarantor specifically, then it is likely you are doing so because your credit profile is somewhat damaged. As such, you will likely be forced to use a payday lender that does not require a guarantor.
How long does it take to apply for a loan without a guarantor?
As it is likely that you will need to obtain financing from a payday loan provider, you should be able to complete the application process fairly quickly. As such, you could receive the loan funds on the same day as the application.
Will I need to upload any documents?
If the lender is unable to verify your identity and/or financial standing electronically, then you might be asked to upload supporting documents..