Comparing different single parent loans in the UK and how you can get approved for each
When you’re a single parent in the UK, trying to get a loan can feel like an uphill battle. The eligibility criteria from numerous banks and traditional lenders can be too challenging to meet, but life will still demand some vital expenses for a car and home repairs and medical bills for your child. Fortunately, there are still options that you can look into to give you that much needed funding in the form of single parent loans. This guide will walk you through what you need to know about getting approved for single parent loans, the options that you can look into and how you can compare them so you can get the best deal possible for you and your present circumstances.
Single parent loans with a guarantor
If you have been rejected for a loan or the loan being offered to you comes with alarmingly hefty interest rates, single parent loans with a guarantor may be the solution you are looking for. The financial products are unsecured types of loans which means you won’t need to offer some sort of collateral to secure the funding that you need. These loans can be a live saver for single parents who have bad credit histories. Here are some of the features of single parent loans with a guarantor that you might want to know:
- With single parent loans with a guarantor, you can borrow up to £15,500 with a payment period that can last up to five years or longer depending on the lender and your qualifications as well.
- The interest rates can vary from lender to lender but mostly hover around 50 percent. While that may sound high, it’s still a lot lower than other options especially if you have bad credit.
- You can access large amounts of loans when you have a guarantor to back up your application then you would if you were to borrow alone.
- Another major advantage with single parent loans with a guarantor is that they can be a great opportunity to rebuild your credit history as long as you keep up with your payments on time. With a new and better credit, you can easily access other types of loans for even larger amounts and better interest rates and terms.
The role of the guarantor in a single parent loan with a guarantor is to act as a backup in case you default from your loan which means that the person will need to cover the loan’s repayments if you are unable to. Your guarantor could be someone you know and trust in a loan deal like a family member or friend and must also be:
- Of good credit standing
- Aged 21 or over
- A homeowner
- Employed or has an income stream that can afford the loan’s repayments
- Financially independent of you (the person must not share the same bank account with you)
It’s important that your guarantor understands what his/her responsibility is on your loan deal to avoid encountering issues that could strain the relationship that you share with each other. Aside from the fact that the guarantor must take over the loan’s repayments if you can’t keep up with them, the person also does not hold any right on the money that you will receive from your loan or has any decision on where to use it. The person is simply there as a backup and must carry all the risk without enjoying any benefit in return.
Single Parent Loans with no guarantor
While single parent loans with a guarantor can certainly help you secure the funding that you need, it could seriously damage the wealth of your guarantor in the event that he or she will have to shoulder your loan’s repayments. And even if you do find someone who is willing to fulfill such an important role in your loan deal, the person will still need to meet strict eligibility criteria to become accepted as a guarantor.
With that being said, there are single parent loans with no guarantor that you can also look into if you need some much needed financial boost:
- Student Loans. The loans are ideal for single parents who wish to seek higher education. There are generally two types of student loans that you can avail: government student loans and private student loans. Be sure to check the eligibility requirements first to see if you are qualified.
- Home Loans. Most single parents in the UK cannot buy a home immediately with cash. Home loans make it possible for single parents to have their own house by paying a mortgage. The loans can cover large amounts for long durations for as long as 25 years.
- Personal Loans. When you’re a single parent relying on a single income to raise your family, bills can often get out of hand and if they have high interest rates, it can become an extremely difficult situation to deal with. You can consolidate every single bill that you have into one personal loan that may carry a lower interest rate. This can help save you a lot of money as a result.
- Payday Loans. Emergency situations can happen anytime and if you are a single parent, securing a quick loan to cover your child’s medical bills or school expenses can become extremely important. Payday loans have been designed for these kinds of situations. They can become a source of great relief in times of unforeseen financial crisis and cash shortages.
- Auto loans. Many people in the UK need cars and this can be especially important if you are a single parent who will need to take your kids to school before going to work and pick them up after and shop for groceries from time to time. Cars are expensive but with an auto loan, you can have a car now and they pay it back slowly every month.
- Business Loans. If you are a single parent who relies on your business to get around, taking out a business loan could help you take things to the next level. There are plenty of lenders who are ready to cater your need for a business loan and there are also programs from the government that you can look into if you are a first business owner.
- Doorstep loans. When you’re a single parent, time is precious and sometimes you simply don’t have the simple luxury to leave the confines of your home to take out a loan especially if your child is still young. Fortunately, there are doorstep loans that can have your loan delivered right at your door by a friendly local agent. The agent will also be the one to collect your payments every week from your home making it very convenient on your part.
Single parent loans for bad credit
The eligibility criteria for the majority of banks and traditional lenders can be quite challenging to meet when you are a sing parent and have bad credit. Fortunately, there are still ways in which you can secure the funding that you need despite your status. There are some specialist online lenders in the UK who provide single parent loans for bad credit to borrowers who are qualified. Often, income and affordability and not credit score is the primary factor in deciding whether or not you are eligible for the special financial products. When comparing single parent loans for bad credit in the UK, here are some of the things that you need to consider:
- Interest rate. There are normally two kinds of interest rates for single parent loans for bad credit: fixed and variable interest rates. Fixed rates won’t change over time while variable rates can. Compare which interest rate is ideal for your needs and situation and choose a rate that is competitive.
- Fees. Just like any other type of loan, there are fees that you need to incur when you take out a single parent loan for bad credit. You should compare this as well as they, together with the interest rates, make up the entire cost of your loan. Short-term loans under 2,000 pounds normally come with fees and without interest rates so take this into consideration as well when deciding how much to borrow.
- There may be restrictions on how much you can borrow and this can vary from lender to lender. In the end, it would be best to choose the option that provides the kind of amount that you need.
- Repayment flexibility. You should make this as one of your top priorities as it could impact your ability to manage the loan. Try to determine if you can pay weekly, fortnightly or monthly repayments and this will help you determine which repayment option is ideal for your budget. You should also put into consideration your ability to make early repayments to save on interest rate payments.
- The lender.First and foremost, the lender you partner with should be licensed by the FCA or Financial Conduct Authority to ensure that your interests are always best protected. Secondly, it should have a solid track record of good and honest service to its borrowers. You can determine this by checking out independent forums and review sites.
Single Parent loans from Direct Lenders
Most single parent loans from direct lenders operate online and you can easily access their loans and services through your smartphone or tablet as long as you are connected to the internet. There are also plenty of online direct lenders that you can choose from in the UK today that may grant you the kind of funding that you need whether it’s single parent loan with a guarantor or a bad credit single parent loan. So you can improve your chances of getting approved for a bad credit single parent loan, you can:
- Examine your credit score. Try to get a copy of your credit report and see what kind of borrowing position you are currently in. The higher your credit score, the better your chances of getting approved. Try to see if there are any discrepancies that may have unintentionally lowered your credit score as well.
- Research your options. Try to do some research online and see what the available options are. Limit your search to those lenders that provide reliable single parent loans that can cater different single parents with unique situations whether they have bad credit, are unemployed, or self-employed. These lenders tend to have lenient lending criteria that will give you the best chances of getting approved. And if your credit rating is really that adverse, you can try opting for lenders that provide single parent loans with no credit check.
- Explore alternatives. There is a wide range of alternative loan options that feature low and high interest rates. These loans are designed to aid single parents for vital expenses such as a car or home repairs and medical bills.
- Borrow only what you need. Always remember to borrow only what you need and afford when you apply for single parent loans from a direct lender. Lenders can reject your loan application if they see that the repayments are something that is too much for your current income and earnings to afford.
- Talk to your lender. Before you apply, try to reach out to your lender and discuss what its eligibility requirements are. Every lender has its own unique eligibility criteria and this is something that you need to check first before even clicking the apply button on a lender’s website. It’s also important to note that every application you make will be recorded on your credit file and too many applications in a short period of time can appear irresponsible in the eyes of some lenders.
Applying for student loans from a direct lender
After you have considered the steps in improving your chances of getting approved that were mentioned above, this would be the time to find the ideal student loans from a direct lender. You can use the information provided by independent comparison sites to search for single parent loans that provide the best rates and flexible payment terms.
Once you have found a potential loan that you want to apply for, simply go to the direct lender’s website providing it. When you start your application on the lender’s website, you will need to provide your contact information, financial information and the amount you’d like to borrow. There are lenders who will let you know instantly if you have been preapproved and will ask for some verification on a few key information before giving you the offer.
- Many lenders are now willing to provide loans for unemployed single mothers.
- When working with a guarantor, larger loans can be applied for.
- Even unemployed parents with bad credit will be considered for a loan.
Single parent loans in the UK and single parent loans with instant funding
Are you a single mother or father searching for a loan in the UK that will give you instant funding? If you are, then single parent loans in the UK and single parent loans with instant funding may be what you need. These financial products are designed to provide emergency funding for a variety of reasons and purposes. You can consider a short-term lender, a traditional bank or credit union or an alternative financial solution.
- Short-term loans. These financial products allow you to borrow anywhere from £100-£2,500 or sometimes £5,000 depending on the lender and your income level. You can use these loans in an assortment of financial situations whether it means purchasing necessities, paying for bills that will be due soon, or to tide you over until you receive your next paycheck. Bear in mind, however, that these loans typically come with higher fees and rates due to the speed and convenience that they provide.
- Instant Bank loans. While banks are notorious for approving loan applications for several days and even weeks, there are actually some banks that provide same-day loans for existing customers, giving you an option to consider if you need funding right away. It’s important to note that you will need to have a solid credit rating to become eligible and your income must be enough to achieve the necessary payments.
- Alternative finance. There are also alternative loans available for single parents who are looking for quick funding as well as charities offering financial assistance. Depending on your circumstances, you may want to consider these as a viable option as well.
- Payday loans. The loans work like cash advances in a way that the lender will grant you anywhere from £100-£2,000 which you will then pay back next month or in your next payday with interest rates. The loans are extremely popular in the UK because of the ease, speed, and convenience that they provide.
With single parent loans in the UK and single parent loans with instant funding, you can normally get the funding that you are looking for on the same day you made your application. If you have good credit, then you may want to opt with bank loans that provide same day funding but if you don’t, you can look into payday loans and other short-term loans for instant funding.
Single Parent Loan FAQs
How easy is it to obtain loans for unemployed single mothers?
In most cases, it will be relatively easy to obtain a loan through one of the lenders we work with, even if you are a single parent and you have a bad credit rating or you are unable to secure a guarantor to assist you.
Can I borrow more money if I can obtain a guarantor?
Yes. Most lenders will be more willing to provide loans for single parents if they are able to provide a guarantor. Your chosen guarantor will need to have a good credit rating though.
Will I have to wait a long time to obtain the funds I need?
When applying, you will normally receive a response to your application on the same day it is received. In many cases, you can have the funds in your bank account within a few hours at the most.
How high will the interest rates be if I cannot obtain a guarantor?
In cases where it is not possible to obtain a guarantor, you may be required to pay higher interest rates on any amount of money you borrow. The reason for this is that you will be classified as a higher risk than someone who is able to provide a guarantor. All information regarding the interest rate that is being charged on your loan will be provided to you at the time of application.
What conditions will my guarantor need to adhere to in order to assist me when applying for my loan?
In order for your guarantor to be accepted when you apply to lend money, they will need to be over the age of 21 years, have a good credit rating, be a homeowner, be employed or have another consistent form of income and be financially independent of you. In other words, they may not share a bank account with you at all.