With emerging new technologies and a surprising price rise, an individual requires a financial threshold to hold up to. It acts as a cushion in life scenarios like- medical emergencies. Moreover, most individuals seek individual and flexible financial solutions to cover short-term needs. It helps them take individual responsibility for their finances and understand it better.
It is the reason financial equipment like- no guarantor loans is the top preference for individuals. It allows individuals the flexibility to counter their needs without bothering loved ones.
What does a no guarantor loan imply?
A loan without a guarantor is a facility that does not mandate someone to guarantee the loan. Instead, it is an unsecured financial solution that helps a person bridge cash shortage with a same-day amount sanction facility.
Typically, one can fetch these loans at higher interest rates than secured ones. This is because the lender shares a high risk for unreliable credit profiles with bad credit histories. Alternatively, individuals with good credit scores and income qualify for affordable interest rates and terms.
One can use the loan for short-term purposes like- repairing a car, paying for stationary, or at a grocery shop to meet cash needs at the last moment. It is thus ideal for students and tenants seeking to build credit history and manage financials individually.
This is the definition of loans without a guarantor facility. Let’s understand the advantages of choosing no guarantor loans for short-term requirements.
6 Benefits of choosing no guarantor loans for your needs
Despite the fact no guarantor loans share competitive interest rates, they are popular among individuals. This is because loans without a guarantor offer the flexibility to counter needs with easy accessibility. Here are other aspects that make it a perfect choice for your emergencies and cash needs:
1) Eliminates the need for a guarantor
Finding a guarantor or convincing someone to be your guarantor is challenging. It is especially true if you have recently shifted the place or live alone. Loans that mandate a guarantor to qualify seem a hassle for such individuals. This is because asking someone to be a guarantor and relying on him with finances is risky. Despite seeking help from loved ones, you may not be comfortable with the proceedings.
Thus, getting no guarantor loans from a direct lender for your needs seems relaxing. It eliminates the hassle of finding and explaining things to a guarantor. Moreover, with you being the sole person on the loan, you find it easy to manage repayments.
2) “No security” fastens the loan approval
Getting a loan without a guarantor is quicker than one with a guarantor. Why? This is because the loan does not require detailed documentation. In a guarantor-based loan, the lender analyses the finances and credit profile of the guarantor and the borrower. If he finds a discrepancy or the profile does not seem right, it delays the approval process.
Alternatively, with you being the sole person, get the loan quickly. This is because here, you only provide your financial details like salary slip, credit history, and identification proof to get the loan. Thus, the third-person absence catalyses the process.
3) Prevents relationship from irreversible damage
A guarantor loan requires the best commitment from both parties involved in the agreement. If one of those does not comply with the agreement terms or breaches it, it strains their relationship.
For example, if you apply your brother as a guarantor. However, your financials fall, and you skip payments. Eventually, your brother must make the payments. If he denies doing so or cannot do so, the loan may enter default. It thus may impact your relationship.
Alternatively, you can keep your finances a private affair with no guarantor loans. Even if you fall on payments, you can get a feasible solution by discussing it with the provider. It keeps you from impacting your family ties.
4) Helps build your credit history
It is one of the most important benefits of a no-guarantor loan. Individuals seeking to build credit from scratch can benefit from no guarantor loans. The loan allows you to split the costs into affordable and equal monthly payments.
Moreover, the lender does so according to the person’s affordability. You can pay according to the money you save every month. By setting up direct debits for monthly payments, you remain regular with the payments. This impacts your credit profile positively.
A good and healthy credit history helps you qualify for affordable and best-interest loans and credit cards for use.
5) Helps you consolidate debt fast
If you have been seeking the best solution to your debt control, consolidation may find you well. It improves your credit rating, reduces liabilities towards debts and deals with multiple lenders.
You may consolidate if your profile reveals multiple debts like credit cards, payday loans, doorstep loans, quick loans, mortgages, student loan debts, and pending utility and subscription bills. Debt consolidation grants the power to reduce liabilities and optimise your personal finances.
With no guarantor loans, you can do that. It’s all about choosing the best debts to consolidate. Choose the high-interest and costly debts with penalty payments. It will be the best way to benefit from the debt consolidation loan.
6) Wider choice of loan products
Every situation shares unique cash requirements. One can use the loan for any purpose, and no guarantor loans are a part of personal loans.
Under this, you can apply for quick loans, payday loans, unemployment loans for benefits, and doorstep loans without a need for a guarantor. All these are unsecured personal loans that you can get for short-term needs. Identify the requirements according to which you can benefit from these income-specific loans.
Bottom line
Thus, opting for loans without a guarantor can ease up your lifestyle the best way. Analyse your situation and the need for quick financial assistance. It will help you know the importance of no guarantor loans for your finances. Apart from helping you build credit, it helps manage your financial requirements individually. It is one of the best ways to counter the needs without being public.
Mark Williams works as one of the Loan Advisors at a direct lender firm, Onestoploansolution. He has been working with the lender for about 15 years. He has been known to facilitate his employer in remarkable ways from writing to consulting and whatnot. He is a professional who wants to explore more of the UK financial market, the loan products and how customer requirement changes with time.
