What is a bad credit score? It is a score that has been applied to those individuals who have not been able to manage their finances well. They have either made delayed payments of their bill or no repayment of the debt taken.

In other scenarios, some circumstances, like unemployment, might have caused a poor credit rating. According to Experian (a prominent credit reference agency in the UK), individuals who have scored between 561 and 720 will be considered among the poor credit scorers.

With such scores, they might be accepted for a loan or mortgage, but they will get on the higher interest rates.

There is nothing more complicated than expecting a loan despite poor credit scores. Mainstream lenders like banks may have the loan provision, but the interest rates will increase again. Besides, the loan conditions will be stringent.

The strictness of the traditional loan providers may have badly affected the loan prospects of individuals with less-than-perfect credit scores. Still, there is a compelling opportunity available. You may opt for very bad credit loans with no guarantor from a direct lender.

Why only the direct lender in the UK? The primary reason is their flexibility in the lending norms. This means that there is nothing fixed when it comes to loan conditions. You will get the loan interest rate according to your affordability or repayment capacity.  

What about the guarantor? There is no compulsion of it. Let us take our discussion further with an in-depth analysis of these loans.

What makes bad credit loans so effective for the aspirants?

There must be some reasons why most financial experts suggest going for bad credit loans only from a direct lender. It implies that something is unique about these loans.

One thing is obvious: getting a loan despite a low credit profile is the most significant feature. You can get a loan with no impact on your poor financial performance in the past.

Before going on to the features, you must understand that these loans are short-term. You will be eligible for a small borrowing amount (for example, from £1000 to £5000) and for a smaller duration like a maximum of up to 36 months.

Other vital features of these loans for bad credit can be as such:

  • Due to the small amount, you may get instant loan acceptance;
  • Providing the guarantor's assurance may not be needed;
  • These will be unsecured loans with no compulsion to secure an asset;

Of course, these loans will have many more features. Still, I suggest you pick this loan when it is too much necessary, and you can afford the high interest rate.

Why apply with no guarantor for very bad credit loans?

There are many conditions attached to a loan. For instance, you should have a guarantor, collateral, a good credit score and a steady income. Each criterion has its benefits. Similarly, having a guarantor will boost your chances of guaranteed loan approval.

Wait! There are some further conditions, such as the guarantor should have a decent credit score. Having a homeowner as a guarantor will make your loan application stronger to be accepted.

Does everyone have such kind of a person with an excellent financial record? The answer is no. Suppose you have a poor credit score. How can someone trust your repayment ability and take your loan guarantee? It is tough.

As an alternative to this situation, direct lenders in the UK have come up with credit loans with no guarantor option. This indicates that you do not need a guarantor to have a loan guarantee. You can convince your lender with recent sincerity and steady monthly income.

However, the interest rate will remain higher. Still, you have better conditions where there is no need to reveal your financial situation to anyone.

Methods to get bad credit loans with no guarantor

Agreeing on mainstream lenders makes it almost impossible to get a loan without a guarantor. You can easily convince direct or online lenders to have a loan. You're mistaken, mate. Direct lenders also expect loan aspirants to fulfil specific eligibility criteria to qualify for their easy loan options.

Therefore, you must follow some methods to get very bad credit loans with no guarantor from a direct lender. Some of them are mentioned here:

Steady income: The most crucial trick to convince your lender is to earn steadily, especially for the last one year. Even if you are not earning a full-time income but a part-time one, it should be stable and continuity.

This method will help lenders to be convinced of your repayment capacity. They can be assured of timely payments of their loan. If you analyse such short-term loans, you will conclude that these are also income-based loans.

Providing collateral: There is no doubt that most lenders offer bad credit loans with no security needed (as these are unsecured). Still, if you have an asset that can fetch a large borrowing amount according to your financial needs, you can opt for secured loans for bad credit with no guarantor condition.

There is a risk involved in it. Suppose you fail to make the repayment or missed paying back the loan. You will lose your personal assets to the lender in such a condition.

Go for joint loans: One more trick is there to get a loan despite poor credit and without a guarantor's compulsion. We are discussing applying for a joint loan with your spouse or close friend. It strengthens your loan application, and the chances of getting it approved will increase.

Your loan partner should have a good credit score and a stable monthly income to do this. It is necessary because if you default between the loan term, your partner should be able to pay back the pending loan amount timely.

Good handling of recent payments: If you are looking for an easy loan option with poor credit, you should know that these are available based on your recent financial performance. Direct lenders may not take an interest in what you have done in the past. Instead, their primary focus will be on the timely payments of recent bills.  

  • First, avoid using credit cards more during the loan schedule.
  • Second, try as much as possible to remain debt-free.
  • Third, organise your monthly income to save money easily for loan instalments.

Look for soft credit check loan only: Many individuals fail to understand the importance of soft credit check loans. It is essential because a hard credit check is unsuitable for your financial records and reduces your loan prospects.

On the other hand, a loan with a soft credit check does not impact your financial profile much. Instead, it avoids marking any search footprints, and many loan providers will not highlight your credit score. If you are a first-time borrower, you can even try a loan with no credit check.

Conclusion

There is no point in which there are fewer opportunities for those with poor credit scores. They are available as bad credit loans or loans for adverse credit scores. However, expecting 100% acceptance, like long-term loans on guaranteed approval, is wrong.

Choosing a responsible lender will not give you a false claim of guaranteed approval, especially when you have a low credit score. Still, your sincerity and proper preparation will upsurge your chances of guaranteed acceptance.

Follow the methods mentioned here and find the most reliable deals on bad credit loans with no guarantor.