How to get a loan with bad credit and no guarantor

How to get a loan with bad credit and no guarantor

Even if you have no guarantor and your credit score is unimaginably low, you can still get a loan. It is possible to obtain a loan with a bad credit score and no guarantor. These kinds of bad credit or no guarantor loans are personal loans specifically designed for people who need emergency funds but have a low credit rating.

Bad credit loan 

What you need is a bad credit loan when you need some quick cash, but your credit score looks undesirable and unlikely to be accepted by most banks. However, bad credit or no guarantor loans do not work like magic. They have requirements too. The only difference is that their requirements are more lenient than most other types of loans.

Just like the personal loans, when you get a bad credit loan, you are expected to pay back in fixed monthly instalments or some cases, a one-time lump sum.

Where to get a bad credit loan

Since the big banks with rigid plans and requirements will hardly give you a loan on your low credit and no guarantor status, where then do you get a bad credit loan? The answer is simple – Lenders! You can get bad credit loans from banks under special conditions or other types of lenders like credit unions.

Here are some of the affordable avenues to obtain a loan with a low credit score and no guarantor.

•Credit unions 

Credit unions come in handy when you are in a fix and need money as an emergency. Credit unions will hardly look at your credit score, and the maximum allowable interest rate is 18%.

•Peer to Peer (P2P) 

Several online platforms are offering P2P loans with attractive amounts and tenures. Though your credit score may still be checked, there are a lot of individual lenders, so you have a higher chance of finding lenient ones who don’t mind borrowers with bad credit

•Friends and family 

Typically, getting a loan from a friend or relative will necessarily require collateral, and a relative will rarely ask to see your credit score. Still, they may request some interest and assurance. Although these are less likely to be as rigid as banks or unknown lenders.

•Online or App-based lending 

You can also explore the digital lending option, usually known as online personal loans, which allows you to obtain loans online based on your salary. Several online platforms connect you to a lender in a matter of minutes once you have applied. Sometimes, these lenders are regarded as virtual banks without any physical address.

However, if you would instead get a loan from a bank with your low credit score, you can try these options

•Secured credit cards/ Collateral 

This option allows you to obtain loans from banks using collateral as a pledge. Such collateral could be gold, property, or a secure credit card. Secured credit loans may not assist you in getting a vehicle or home loans, but you can get any other form of loans with no guarantor or a high credit score.

•Unsecured loans 

Unsecured loans attract very high-interest rates and may not be easily accessible. Typically, what you need to get an unsecured credit is proof of good income from a respectable company. You may get a home loan through unsecured credit, but this might be offered at a reduced amount. Unsecured loans do not require collateral and may even help you build your credit score.