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Guarantor loans are a great way for people with bad credit to borrow money at a reasonable rate and with an affordable repayment plan, so they can get their life back on track and repair their credit score. But what if you need bad credit loans with no guarantor? What if you can’t find anybody to guarantee your loan and get you access to better offerings?
If you’ve got bad credit, it can already feel like you’re not left with many affordable borrowing options, and it can get incredibly disheartening to have one of the more affordable options taken off the table.
Finding bad credit loans with no guarantor – your options
Option #1: Double check your guarantor options
When you apply for a Bamboo guarantor loan, your guarantor can be anybody that is over the age of 21 and that has a regular income and can afford to make your repayments, if necessary. Of course, it’s a good idea to make sure you choose somebody that trusts that you and that you have a good relationship with. That often means that people think they can only ask their immediate family to be their guarantor. This is not always the case. You can ask friends or even acquaintances to help you out.
Write down a list of everybody that you have a good relationship with and who might be able to help you out by being your guarantor. Although it isn’t necessary, a good indication that they might be able to help you out is if they own their own house.
Now go through that list and see who you’d be comfortable asking, and who would feel comfortable helping you out. Is there anybody there you haven’t already asked? If so, perhaps see if they’ll be your guarantor. If they say yes, you’ll be able to borrow money at much better rates. For more on choosing a guarantor, check out our handy guide.
Remember, this isn’t a decision to rush into. Money is often the number one cause of tension and stress in friendships and relationships, so make sure that you’re not risking your relationship (even if you don’t think anything will go wrong).
Option #2: Borrow from friends and family
Now, we know that if you couldn’t find a guarantor, you might also struggle to find somebody to borrow from, but it’s also not unheard of that friends and family say ‘well, why don’t we just lend you the money instead?’.
In fact, in recent years, the Bank of Mum and Dad has seen a tremendous amount of business. According to StepChange, a charity that helps people in debt, a quarter of all adults in the UK are currently in debt to a friend or family member, owing around £4,000 on average.
However, if you’re thinking of asking your friends and family for a bit of help, be careful not to pressure them or make them feel they have to lend you the money. It’s a tricky subject to broach, but it’s best to be open, honest and make it clear that they are free to say no with no hard feelings. Borrowing from friends and family is a divisive topic, if you’re thinking about it, be sure to check out our article on the pros and cons before you make a decision. Our next option to get a bad credit loans with no guarantor is not a loan option at all, however it may be better for you.
Option #3: Get an overdraft
If you’re eligible for an overdraft on your current account (or you already have one that you haven’t used), then you may not need to look for loans for bad credit with no guarantor; you might be able to use your overdraft instead.
However, be sure to remember that overdrafts often come with a hefty interest rate (according to the Bank of England, the average interest rate for an overdraft is 18.26%) and are a form of revolving debt, much like credit cards. Although they can grant you immediate access to money you need in a hurry, they can also trap you in a cycle of living out of your overdraft (and paying hefty interest rates) if you’re not careful. To find out more about the pros and cons of using your overdraft, check out our overdraft breakdown.
Option #4: Peer-to-peer lending
P2P lending is a little bit like borrowing money from a person you know, except with added interest (and you’re borrowing from a complete stranger over the internet). Or, in other words, you borrow from individuals that can lend you what you need and agree to their repayments rates. These repayment rates are often fairly high, but are usually lower than you’d be offered from a high street bank but is a viable option if you’re looking for bad credit loans with no guarantor.
However, we always like to point out that the Money Advice Service have a few warnings about P2P lending (which is still a relatively new idea):
You might have to pay a fee to the platform for arranging the loan, even if it is not fully funded. This can mean multiple fees if you have to apply more than once.
You might not have the same protections using a peer to peer platform as if you borrowed in other ways. This varies according to how the loans are drawn up and who the lenders are – for example, whether they are institutional investors or private individuals. Ask the platform how this works and how it differs from a normal loan.
Option #5: Find specialist loans for bad credit with no guarantor
Here at Bamboo, we don’t think that your financial future should be at the mercy of a few slip-ups in your credit history, so we’ve made sure to create loan products specifically designed to help people with bad credit (and no guarantor) get access to the money they need.
Why? Well, most of all, because we think you deserve the help, but also because we know that one lender letting you borrow money can help you repair your bad credit score for good and help you finally break the borrowing-repaying-borrowing-repaying cycle.
That means that we offer bad credit loans with no guarantor of up to £5,000. And even better, it only takes a few minutes to find out how much you can borrow and how much you’ll have to pay back with no impact on your credit score. Representative 49.7% APR.
- Author The Bamboo Team
- Posted 16 November 2018