It’s a loan where you don't need to find someone who'll keep up the repayments if you can't make them. So most loans are loans without a guarantor – where it’s just between you and your lender.
But non-guarantor loans are generally aimed at people with poor or bad credit who don’t have a guarantor.
Payday loans are a type of loan without a guarantor. Make sure you understand the interest rate and repayment terms.
But even though they aren't marketed as 'non-guarantor loans' there are plenty of other types of finance that don't need you to have a guarantor:
The interest can be high on loans that are marketed as non-guarantor loans, which makes them expensive in the long run.
What works best for you will depend on your circumstances, so it’s worth exploring other options too before committing.
Look after your finances and you're less likely to need a guarantor for a loan, or to be limited to expensive finance that's marketed as 'non-guarantor loans'.
A good credit rating shows lenders that you’re reliable when it comes to paying back debt
Debt-to-income ratio is the amount of your wages that you use to pay off your debts. So a lower ratio will give you a better chance of being accepted for loans
Proving you have a regular income reassures lenders that you’ll be able to afford the loan repayments
Before applying for any loan, ask yourself these four questions:
Think about whether a loan is the best thing for your circumstances. There might be another way – for example, waiting until you’ve saved up the money, or asking a friend or family member for help.
If you’re not sure what to do, you can get free financial advice from your local Citizens Advice Bureau, National Debtline or StepChange debt charity.
If you decide on taking out a loan, you’ll need to figure out how much you want to borrow.
Lenders will also want to know what you plan to use the loan for, like home improvements, funding a wedding or to buy a new car.
There might be exclusions as to how you use the money. Some lenders won’t allow you to use a loan for a house deposit, for example. It’s always best to be honest about your intentions.
Consider how much of your monthly income is left, after you’ve paid your usual expenses and bills. Set aside a little extra money for savings or to use as emergency funds – like for unexpected vehicle or home repairs.
Think about whether what’s left of your income would be enough to make loan repayments.
Read the terms to find out things like the repayment amount, interest, what happens if you can’t pay it back and if there are any additional fees.
You can do a soft search to check for non-guarantor loans you might be eligible for without impacting your credit score, You’ll be able to read the terms then.