Why People Choose Us
You might be surprised to hear just how easy it is to apply for a short term or personal loan. Furthermore, you don’t even have to leave your chair to apply for it. Instead, you just simply fill out our very short form and if you are accepted by a lender you’ll get your loan by the next day.
Different Loans in the UK and the best way to access them
There comes a point your life when you need to borrow money. Whether you need quick and reliable financing to purchase a brand new car or even purchase a house, if you do not have enough money in your bank account, you can turn to loans in the UK to satisfy the funding that you are looking for. Simply put, a loan is type of borrowing that has to be paid back with an interest rate. However, there is an assortment of loan options available in the UK today and the ideal one for you will depend on your present circumstances. With that being said, below are some of the popular loans in the UK that can help you enjoy the kind of financing that you are looking for as well as the ways in which you can better position yourself in accessing them.
Loans with a Guarantor
When you apply for a loan, the bank or lender will utilize a certain criteria which would help them in determining your ability to repay the loan on the agreed terms and conditions. Your present income, credit history, employment status and assets will be evaluated. If you fail to satisfy any or some of these criteria and your loan application becomes rejected, you can consider asking another person to be a guarantor in your loan deal.
Here’s how a guarantor loan works in improving your chances of getting approved for a loan in the UK:
- If you fail to meet the income or credit history criteria, you will be considered an automatic risk in the eyes of lending institutions. By putting a family or friend as a guarantor in your loan deal, they are practically co-signing your loan and guaranteeing that the payments will be made on time.
- The guarantor is basically a form of security in the part of the lender making your loan application less risky. This reduced risk allows you to obtain large amounts of loans for flexible payment terms that would otherwise be impossible to enjoy if you lack the qualifications.
- And because the presence of the guarantor virtually minimizes the risk involved in your loan deal, you will also enjoy lower interest rates with a guarantor loan. A lower interest rate means that the loan will cost you less, helping you pay it off much faster.
What is a guarantor?
To a certain extent, every kind of loan is a risk to the lender. If you have a poor or none-existent credit history, are self-employed or have an unstable income, you will find it extremely hard to secure a loan from a bank or traditional financing institution. This is where a guarantor can help you out.
The guarantor is a third party, normally a family member, relative or close friend who agrees to shoulder the risk when you take out a loan. Simply put, the guarantor is a person who guarantees your loan using their own name and reputation and money and assets as well. Because the guarantor agrees to take over the loan’s risk, if you miss out from your payments or completely default from it, the guarantor will assume financial responsibility for the money borrowed.
There are a few benefits that having a guarantor can help you enjoy and they include:
- The guarantor can aid you in satisfying the criteria for a loan you’d otherwise not be eligible for.
- Because there is an extra guarantee in your loan deal, the lender will see it as a reduced risk, giving you a better rate and payment term as a result.
While it may sound that you are enjoying less responsibility with the type of financial product, entering into a guarantor loan is a huge responsibility for both borrowers. In the event of a default, both you and your guarantor’s credit rating will be negatively impacted hurting your chances of securing credit cards and other types of loans in the future. That’s why before you apply, ensure that the loan is something that you can genuinely afford.
Types of guarantor loans
If you apply for a loan, the option of a guarantor is typically a feature and not a different type of loan itself. Normally, there are two types of guarantor loans that you can take out in the UK market: secured and unsecured.
Secured guarantor loans.
If you are considering borrowing money and you don’t have any assets at your disposal, your guarantor can use his/her car, property, or any high value asset as security against a loan. The main advantage in utilizing an asset to a loan is that you can get access to large amounts of credit that you might not have been able to borrow. Since the guarantor is submitting a valuable item as collateral, the loan becomes less risky and the interest rates more affordable as a result. The main disadvantage however, is that when you default from your loan, the lender has the legal right to seize the asset and sell it to recover the money that you still owe them.
Unsecured guarantor loans
If you choose an unsecured guarantor loan, there is no need for you and your guarantor to offer an asset as collateral in your loan deal. But don’t think that such a loan is something that you can exploit by borrowing money and never paying it back. There are serious implications for both you and your guarantor in the event that you default from your unsecured loan. And because they are riskier than secured guarantor loans, they also tend to have higher interest rates.
Who can be your guarantor
Depending on the amount you want to take out and the type of loan, every lender has its own distinct eligibility criteria for a guarantor. There are lenders who only accept guarantors who are parents or immediate guardians of the borrower and there are others who are a bit more lenient and accept relatives, siblings and even close friend and colleagues. Normally, the guarantor should also be someone who is:
- More than 22 years of age in the onset of the loan
- A legal resident of the UK with an active bank account
- Possesses a stable income that can afford to cover the loan’s repayments
- Has a strong credit standing
- Be a home owner (although there are lenders who accept non homeowners)
- Must not be financially dependent from the borrower e.g. a spouse
Loans with no guarantor
Guarantors are designed to help people with poor or no credit histories and lacking qualifications to obtain funding that would otherwise be inaccessible to them. However, in numerous instances, a person can still obtain a loan even without a guarantor. Here’s how you can improve your chances of securing a loans with no guarantor:
Check your credit report regularly. Before you apply for any type of loan, it would be best to check your credit report first to see what your current rating is. Obtaining this information can help you negotiate for better loan deals and ensure that the presence of a guarantor won’t be needed.
- Request a copy of your credit report from each of the three major credit bureaus where lenders will check your score: Equifax, TransUnion and Experian. You can easily access these bureaus online and get a copy of your credit reports through their websites – a simple phone call would also suffice.
- Credit scores are determined through an array of factors such as your history of paying bills, total indebtedness, and credit requested. Scores can range from 500, which is the poorest, to 850 being the most excellent. If your score is below 600, then you might need a guarantor to secure a loan.
Check for any problems in your credit report and deal with them ASAP. After you have secured copies of your credit report, evaluate them and check if there are any inaccuracies or errors. You need to ensure that your credit report is clear of any issues before applying for a loan. You can go about it by:
- Paying off collections and judgements
- Contesting any mistakes that can negatively impact your credit score as this can lower your chances of getting approved for a loan. You can contest any errors in all of the three credit bureaus through their websites.
- Guaranteeing that there is not a single credit fraud or identity theft recorded in your report which could undermine your chances of obtaining a loan.
Understand the difference between a secure and unsecured loan. If your credit rating is not that stellar, you can offer any of your assets such as a property, physical equipment, or stocks, to obtain a secured loan. By putting one of your valuable assets as collateral, the lender can feel at ease knowing that he can get his money back even in the event of a default. An unsecured loan on the other hand, will require you to have an excellent credit score or a reliable source of income, as there is no security in the part of the lender. Unsecured loans tend to have higher interest rates and are more difficult to obtain, as they are riskier loan products.
Online Loans for bad credit
While majority of banks and credit unions will reject your application for a loan if your credit score is somewhere below 660, there are plenty of online lenders who will. As a matter of fact, there are online lenders who specialize in providing bad credit loans to borrowers in the UK. To improve your chances of getting approved for the unique financial products, bear in mind these essential points:
Determine your ability to repay the loan. So you can obtain funding, you must first prove to a potential lender that you can make the proper repayments on the agreed terms and conditions.
- Your loan’s payment terms will depend on key factors such as your income, your loan’s interest rates, and the repayment schedule which is often tailored to your present circumstances.
- You will need to provide information on any type of income you are enjoying and verify that it has been stable for a prolonged duration of time. Some of the verifiable income sources that you can offer to lenders include employment wages, social security, pension payments, alimony or child support payments, and rental income.
Check your debt to income ratio. To become approved, you will need to qualify for the loan amount that you are applying for. This helps the lender determine that your monthly loan payments satisfy a specific debt to income ratio.
- For instance, a lender may require that the total cost of you monthly debt obligation, including your loan payment, should not be more than 36% of your entire monthly earnings. Debt to income criteria differ from lender to lender and the type of loan that you apply for. But as a good rule of thumb, it would be best to ensure that your debt to income ratio is 30 percent or less before you start applying for a loan.
- Consider any collateral that you can offer in your loan deal, such as a savings account, stock, physical equipment, or other assets.
4.) Loans in the UK and loans with instant funding
When you apply for loans with instant funding in the UK, the process is relatively quick and easy. This is because a smart tool will only ask a few basic questions about your present circumstances and affordability and will provide you with an instant decision on what your chances are of getting approved for the kind of loan that you choose. After that, you can decide whether or not you would like to proceed for your chosen loan free of any charge or obligation whatsoever.
Normally, the process in taking out instant loans include:
- Takes only 2 minutes to complete
- No impact on your credit score
- Get an instant, no obligation decision
The loans are normally short-term loans that can help you deal with unforeseen emergency expenses such as car and home repairs, medical bills, and the like. The financial products allow you to borrow a modest amount of money that can be used for any legal purpose. They are also easily available online and can cater different kinds of borrowers from those who are self-employed, unemployed, and have bad credit ratings.
Applying for instant loans in the UK
To obtain an instant loan in the UK, you will need to provide the lender with:
- Your contact information
- Access to your bank account
- Proof of income.
The payment terms vary from lender to lender and the type of loan that you choose. If it’s a payday loan, then the lender may normally require you to pay off the loan in a single lump sum. If it’s an instalment loan, then you will need to make fixed monthly payments on an agreed schedule.
5.) Loans from a direct lender online
Online direct lenders are one of the fastest growing sources of funding in the UK, providing risk free lending without hectic and tedious steps involved. What’s more, there are lenders that provide competitive loan rates that are lower than credit cards and some banks. They also provide an assortment of financing options from bad credit loans and those without credit checks. And because the application process they provide is conducted online, you can virtually obtain a loan anytime and anywhere you are in the UK.
Any credit rating is welcome to apply
If you try to shop online, you will discover that there are plenty of lenders who provide quick and reliable funding to people with bad credit. You can also access varying amount depending on your needs and present circumstances and on your qualifications as well. The loans also provide the best chances of approval with payment terms that are tailored to your present financial circumstances to ensure that your loan is perfectly suited to you.
You can expect loans from direct lenders to be:
- Free of any fees or hidden charges whatsoever. Your application is free
- Loans are quickly approved without any hassle
- You can enjoy a higher rate of approval
- There are numerous no credit check options available
- Flexible loan value guaranteed
- Easy lending and repayment terms
The seamless process of taking out a loan from a direct online lender
Direct lenders understand that time is gold that’s why they have tailored their application process to be as quick and seamless as possible. This means that it’s a relatively paperless, simple and comfortable experience altogether. So when you are faced with an emergency situation and you need funding right away, direct lenders can provide you with the financing that you need without much delay and hassle.
So shop around and compare the APR’s and check different lending terms and conditions from direct lenders in the internet. The loans from these lenders are also safe and every bit of information that you share online when you apply are stored in an advanced security network.