Some individuals who want to acquire a loan do not have someone eligible or willing to become their guarantor. Agreeing to be a guarantor means that you are willing to pay the loan if the original borrower fails to do so. Understandably, not everyone wants to be responsible for someone else’s debt.
However, some lending companies prefer their borrowers to have a cosigner. If you need cash but have no guarantor to back you up, here are some steps you can follow to get approved for your loan.
Steps to Follow When Applying for No Guarantor Loan
To acquire a no guarantor loan, you should first do extensive research about this loan option. It is best to become familiar with the requirements for this loan before talking to a lending company and applying for one.
Look up lending companies that are willing to offer you this option. However, this lending option usually has a loan term with a high-interest rate. This is the downside of acquiring a no guarantor loan. Comparing interest rates among lending companies, with thorough research, would be the best plan.
After choosing a lending company that offers the best term, you can now apply for a loan. You can go to their office or process your application online. Check the lending company’s website and see if they are offering online applications.
Once you provide the information and requirements needed, the lender will then evaluate your application and decide whether you are eligible for the loan or not. If your application is accepted, the loan amount you applied for will be deposited directly into your account. You can withdraw your loan from your bank account anytime you need it.
Do not forget to fulfill your obligation by religiously paying your loan. Paying your loan obligations on time will be an advantage as it will positively impact your credit record.
Types of No Guarantor Loan
Aside from payday loans, there are two more loan options offered by lending companies that allow the borrower to apply without a cosigner. If you do not want to acquire a loan with quick repayment terms and high-interest rates that the payday loan possesses, you can try applying for one of these two options.
Personal Loans
The most popular amongst all the loan options are personal loans due to easy requirements and availability. These loans can be used for just about any purpose. You can use it to pay debts, fund a small business, and pay for bills or emergency expenses.
According to https://www.creditninja.com/dojo/california-personal-loans/, many Americans are in need of loans, especially Californians, given the states’ high housing costs are twice more than the national average. These people struggle with their finances, and many resort to personal loans to meet everyday needs.
These types of loans are available through banks and other lending platforms, and won’t require a guarantor. The lending company will not ask for a consigner when you process your application if you can prove that you’re capable of paying back your loan.
Personal loans’ accessibility is also one of the main reasons why many borrowers prefer it over other types of loans. Wherever you reside, some lenders offer personal loans.
Additionally, the lender might no longer check your credit record if you have a high monthly income. Knowing your capacity to pay the loan is more than enough for them to approve your application. Some personal loans are also unsecured, which means they do not need collateral to guarantee the loan.
P2P Loans or Peer-to-Peer Loans
If your personal loan was denied, you could try applying for a P2P loan. Individuals and private investors are the ones who offer P2P loans to consumers. These lenders usually offer loans through online platforms, which is an advantage due to the flexible and hassle-free application process.
P2P lenders can be found online through their websites. The application process will take place online and nowhere else. Just be careful with this type of loan as most bogus lenders use this option to scam borrowers. Before moving forward with your application, better do a background check to the lender.
Why Do Some Borrowers Opt for No Guarantor Loans
Looking for someone willing to be a guarantor is not an easy task. Being a guarantor has a big responsibility to take and can severely impact their credit score. The burden of being a guarantor is heavy, and the search for one challenging and frustrating to a lot of borrowers. This is the very reason why some choose not to have a guarantor when acquiring a loan.
Precautions for No Guarantor Loan
The no guarantor loan is the most often used bait scammers use to lure their victims. You might stumble upon illegitimate lenders during your search for lending companies that are offering this option. However, you can steer away from these illegal lenders by looking for some red flags.
The most obvious indicator of a scammer is when the loan is offered via phone call and not on their physical office. Asking for upfront cash is another indication of fraud. Legitimate lenders do not do this as they are the ones who will be lending you the money, not the other way around.
Takeaway
Having a no guarantor loan option widens the options of consumers and doesn’t require heavy documentation. However, finding a guarantor is a process full of hassle, especially if you do not have someone you can trust. The options mentioned above give the borrowers an opportunity to apply for a loan without going through all of that.