Where Can I Get A Loan With Bad Credit And No Guarantor?
Updated: November 21, 2023 Author: Paul Gillooly
Quick answer: You can get a loan with bad credit and no guarantor from several UK lenders. We compare 30+ no guarantor lenders, find the best match for you and provide a no obligation quote in minutes here.
Getting a loan with adverse credit from traditional lenders can be difficult, add the unavailability of assets and no guarantor to this equation and most high street banks and building societies won’t even consider your loan application.
Fortunately, these days alternatives aren’t as hard to come by, as long as you know what you are looking for.
Where to get a loan with bad credit and no guarantor
If you have bad credit, a loan with a guarantor will be the easier option. But getting a guarantor involved means making a third-party legally responsible for your debt if you default on it.
For starters, you may not find a lot of people who’d agree to put themselves in that position. Also, some people might be embarrassed to discuss your financial issues with friends and family and ask them to stand as the guarantor for you.
The good thing is that you can get a no-guarantor bad credit loan from lenders who specialise in providing loans to people with poor credit scores.
As a comparison site/ broker, we compare dozens of lenders and can tell you which ones are most likely to approve your application. When providing you with your quote we only perform a soft search on your credit which means there’s no hard credit search and your rating won’t be affected.
Here’s an overview of all your options:
Credit brokers: They match your borrowing requirements and specific financial situation with their pool of lenders. While there is no guarantee of loan approval, they typically offer a large range of bad credit options. So, there is a higher chance that you will find something that suits you.
Peer-to-peer platforms: These work differently from banks as they involve individuals who are willing to lend money. The online platform or offline broker serves as the middleman for the transaction, hence the terms and rates are set by them. So, in addition to the interest rate, you will also have to pay platform/broker commission and administration fees.
Direct lenders: Applying to a lender directly means there’s no middle man, but, this also means that you’re subject to individual lenders borrowing criteria and have less chance of approval when compared to a comparison site or broker.
High street shops: Typically, these agencies offer one or two specific types of bad credit loans. For instance, payday loans, doorstep loans, logbook loans and others.
Credit unions: Many, not all, credit unions offer no guarantor and bad credit loans to their members. If you are already a member of a credit union, borrowing from them would certainly cost you less than the other options (APR of 42.6%).
However, according to a 2018 report from StepChange, nearly 80% of people who ask to borrow from credit unions are turned down for not being creditworthy.
How to get a loan with bad credit and no guarantor
1. Understand your options: Bad credit loans offered without a guarantor are typically short-term and small. So, it’s unlikely that you can get more than £1,000 to £10,000. In fact, many lenders will limit the borrowing to £5,000.
If you need more than that, these options will likely not work for you. Also, when you consider the interest rates, it makes sense to strictly borrow only as much as you need.
2. Know your capacity to repay: This is a crucial consideration that all potential lenders are likely to evaluate as well. Before you take on more or new debt, ask yourself if you can afford it. Is your income secure enough to make regular and timely payments? Are there any other debt obligations that you are already handling?
If yes, will you be able to accommodate the repayment of the new debt without the outgoings impacting your living costs? Remember, the longer you take to repay these loans, the more you’ll end up paying for them.
3. Learn about the various loan types available: A short-term, unsecured, no-guarantor loan for bad credit is just one of the options available to you. Of course, there are other credit products, and you will find that many of these may be more affordable or better suited to your requirements. These include:
a. Payday loans: They are fast falling out of favour, given their exorbitant interest rates. However, these loans can help to stretch your paycheck.
b. Second charge loan: This is a secured and long-term loan hence the principal could go up to £50,000. It’s a second mortgage that is offered against the equity you have built up in your home. A second charge loan is a separate mortgage that’s below your main or primary mortgage. So, it’s not the same as re-mortgaging.
c. Logbook loan: This is another secured loan for which the vehicle you own is used as security. The APR of logbook loans usually starts at 100%. The value of your vehicle will ultimately be the deciding factor, but the loan range is typically between £500 and £10,000. Logbook loans alternative
d. Authorized overdraft on your bank account: Think of this as a clever way to take a small loan for a short period at just 24% to 40%. It’s still expensive but the loan would cost you less than what you’d pay to lenders. Having said that, unauthorized or unarranged ODs will cost more. Also, be prepared to pay both a setting up fee and a monthly fee to avail of this service.
e. 0% credit cards: Even with adverse credit, you can get a 0% spending credit card which can help you to tide over tough times. While such cards do offer respite for a few months, once you are past the 0% period the APR quickly climbs to as much as 30% or more. So, it’s imperative to not overspend and to budget for quick repayment.
f. Credit builder cards: This form of credit is specifically designed for people with poor credit, hence you get more leeway when it comes to the application criteria. Also, you get the money without interest as long as you pay your balance in full at the end of each billing cycle. Plus, every time you clear your balance you build your credit score.
g. Community Development Finance Institutions: These independent organizations offer small and short-term loans to people who cannot borrow from mainstream lenders. They’ll charge you more than credit unions, but they do lend despite poor credit and without a guarantor.
h. Government loans: Budgeting loans up to £812 are available for people on income-based benefits. These are interest-free loans that can last for up to two years. To apply go to your nearest Jobcentre Plus or visit Gov.uk. The only problem here is that this is a long drawn-out process. For instance, it can take up to 20 days for loan approval (if it is approved) and another 21 days to receive the funds.
i. Advances on Universal credit: This option is available for those who haven’t received their first universal credit and for people whose payment has been reduced/stopped. In both scenarios, you could apply for an advance, which would get you the initial amount earlier. The money is repaid automatically through reductions made to future universal credit payments.
j. Support and assistance from the local council: Most local councils offer some form of support to people and families struggling with adverse financial conditions and emergencies. Although the criteria of these councils vary, the assistance is generally only available to those on income benefits.
k. Revolving credit and line of credit: Companies like Drafty, Creditspring and others offer a one-time line of credit or revolving credit up to a certain amount. Creditspring charges a monthly fee to make the service available to you when it’s required. Most other such companies charge interest on their lending but don’t charge a monthly fee.
4. Get quotes and compare: Once you zero in on the type of loan you want, do your homework and compare quotes from as many lenders as you can. Find out what the loan is actually going to cost you by adding processing fees, interest rates and any additional or undisclosed charges.
Calculate the costs for repayment as planned, early repayment and also delayed repayment. This way you will be prepared for all scenarios. Also, ensure that you are dealing with reputable establishments and as far as possible try to work with direct lenders or comparison sites as apposed to brokers who charge fees.
5. Learn about the eligibility criteria and apply for the loan: This information can be found on the website of the lender. Read the eligibility criteria and process for evaluation before actually applying for the loan. Always be honest when applying for a loan and uncheck the marketing opt-in box when submitting the application.
No guarantor loans for people with CCJs
Having a county court judgement (CCJ) would make it much more difficult to borrow. If you do have a CCJ you may consider avoiding borrowing the 6 years have passed and the CCJ is resolved.
If you find yourself in emergency need of funds while having a CCJ there may be options available to you.
Types of no guarantor loans for people with CCJs: Both secured and unsecured loans may be available to people with CCJs who cannot bring in a guarantor. As with regular credit, secured loans will generally cost less and will be easier to get.
Depending on the amount required, you can use your house, car, or equity/bond/precious metal investments as collateral.
Eligibility criteria for short-term CCJ loans: For starters, you can only qualify for this loan if you are a full-time resident of the United Kingdom and over 18 years of age. Moreover, you will need to have:
- A valid bank account, debit card, email address and mobile.
- Proof of the fact that the CCJ has been satisfied (outstanding debt has been cleared) or it is in the process of being satisfied.
- Proof that you are working in the UK and have a steady source of income. • Minimum earning of £500 to £800 (will differ based on the lender).
- Proof that you are able to afford the loan.
Different products for people with CCJ and no guarantor: Depending on how much money you want to borrow, your options can include:
a. Instalment loans: These are small loans up to £1500 with terms that are more flexible than those of payday loans. The APR range is between 300% and 500%, which makes them more affordable than the latter.
b. Low balance credit cards: The opening credit line rarely exceeds £250 but as is the case with credit builder cards, you won’t have to pay any interest on the money if you clear your balance at the end of the billing cycle.
c. Doorstep loans: These are short-term loans with the difference that in addition to your credit rating and of course your CCJ, the lender will also get to know you face to face. Of course, it is also possible to apply online but an at-home evaluation means that the lender can assess your situation more realistically. The amount you can get is typically small (a few hundred pounds at the most). But, you can get the funds in cash or straight into your bank account. The loan has to be repaid in the form that it was received in.
How to improve your chances of getting a CCJ loan without a guarantor
While you cannot get a CCJ removed from your credit report before 6 years, there are things that you can do to improve your chances of securing a loan despite a CCJ, such as:
- Before applying for the loan, check your credit report. Tackle any mistakes or disputes at the earliest because changes, if any, can take at least 3 months to reflect.
- If you are no longer associated with a lender/creditor, unlink yourself from them.
- Wait for as long as possible after the CCJ to apply for a loan. The farther away you are from the date on which the CCJ was issued the better will be the chances of loan approval.
- Limit the number of loan applications you file to no more than one every three months.
- Before applying for a loan, inquire about the credit checks the lender performs. A lot of companies now settle for soft checks when offering bad credit, no guarantor, CCJ loans. These won’t impact your credit score.
• If you own your home, this will be a definite plus.
• Establish a history of regular and timely repayments to other creditors. • Meet the repayment terms of the CCJ.
• Create a history of regular income/earnings and savings.
Direct lenders in the UK who provide loans without guarantors
118 118 Money: They offer loans up to £5,000 at a representative APR of 49.9%. You can borrow for 12 to 36 months and they also offer credit cards for people with poor credit.
Bamboo Loans: You can secure a loan of £1,000 to £8,000 from this company for 26.9% to 69.9% APR, depending on your creditworthiness and the principal amount. The loan can be taken for a period of 12 to 60 months. Existing customers can also apply for top-up loans.
CashASAP: This Company offers quick and small short-term loans. The minimum amount you can get is £100. But, if you are a repeat customer, you will be allowed to take this up to £750.
They cap the lending at £400 for first-time borrowers. You can take their payday loans for 35 days at a representative APR of 1288%. They also offer the option of short-term loans which can be taken for 6 months at a rate of 290% pa.
CashFloat: This company also offers two loan options. Their payday 2.0 loan is slightly different from other payday loans in the sense that you can borrow between £300 and £1000 for a period of 6 months at a representative APR of 543.48%. The other option they have is that of Cashfloat personal loan that allows you to borrow between £1000 and £2500 for a period of 6 to 9 months for a representative APR of 295.58%
DotDotLoans: You can borrow between £100 and £1000 from them and repay over a period of 3, 6 or 9 months at a representative APR of 1228.67%.
Everyday Loans: Their loans start at £1,000 and go up to £15,000. Repayment terms range from 18 months to 60 months at a maximum APR of 299.8% (Representative APR of 99.9%). They have several local branches and while they do offer conditional approvals online, you will have to visit them before the loan is finalised.
Fernovo: You can opt for an instalment loan of up to £1,000 from this lender for a period of 2 to 6 months. The company offers a fixed interest rate of 0.8% per day or 292% per annum. They also offer payday loans for a maximum duration of 38 days.
Finio loans: Formerly known as Likely loans, this company offers personal loans of £500 to £5000 for a period of 12 to 36 months. Their rates start at 20% APR and go up to a maximum of 69.9% APR, with a representative APR of 39.9%.
Lending Stream: They offer loans between £50 and £800 for a period of 3 or 6 months. If you are a repeat customer, you can borrow up to £1500 with a repayment term of 12 months. Their representative APR is 1333% for 6-month loans and 325% for 12-month loans.
Loan Pig: They offer short-term and payday loans in the range of £50 to £1,500. You can borrow for 2 to 12 months at a maximum fixed APR of 292%.
Loans2Go: They offer two personal loan products. At the lower range, you can borrow between £250 and £1,000 for a maximum period of 18 months at an APR of 770%. At the higher range, you can borrow between £1000 and £2,000 for a maximum period of 24 months at an APR of 320%. The company offers flexible weekly, fortnightly and monthly repayment options.
Moneyboat: They offer loans in the range of £200 and £1,500, and you can repay your loan in 2, 4 or 6 instalments, paid every month. The company has a fixed interest rate of 0.7% per day on the outstanding amount and a maximum APR of 939.5%. You will need to have a minimum monthly earning of £1,000 to borrow from them.
Quidmarket: This company allows you to borrow between £300 and £1,500 for a term of 3, 4, 5 or 6 months. You will pay an annual rate of 292% on the borrowing or a maximum APR of 1625.5%. Quidmarket offers both payday and short-term loans, but to be eligible, you will have to be employed with minimum monthly earnings of £1300.
Savvy: You can borrow between £300 and £1200 from Savvy and repay the loan over 8, 12 or 15 months. The company offers a representative APR of 1291.1%.
How to rent with bad credit and no guarantor
Just like taking out a loan, renting can be a problem if you have bad credit and cannot bring in a guarantor. Landlords will conduct credit checks (with your written permission) to ensure that you have the financial capacity to pay the rent.
If you have battled financial problems in the past, are a first-time renter or have recently taken out a loan, your credit rating will be less than desirable. Although this will likely be an issue, here are a few tips that can help:
Be honest and open about your credit history: You will have to submit to your landlord’s scrutiny of your credit report, so it makes sense to be upfront about your bad credit. At the least, you will save yourself the time and the trouble of the first viewing and negotiations.
Also, explaining the circumstances that led to the problem helps to get people to see things from your point of view, especially if you have since made efforts to mend things.
Ask previous landlords to put in a good word: One of the best and most effective ways to prove that you are a reliable tenant is to get previous landlords to vouch for you. At the end of the day, potential landlords are only concerned with one thing – Your ability to pay your rent. So, proving that you have been consistent with your rent payments in the past will certainly work in your favour.
Consider cohabitation: If you can get another housemate, the burden of proving your reliability in terms of rent will be divided between the two of you. So if your housemate has good credit standing, your less-than-perfect credit history may not be as much of a problem.
Let your deposit talk for you: Money works even where and when words don’t. And what better way to prove your ability to pay your rent than to offer it in advance? Because this brings down the risk exposure of your landlord, it is one of the most effective ways to get your application accepted. But, only do this if you have the cash to spare and will have enough money to tackle necessary expenses after making the payment.
Seek help from your university: Some academic establishments offer guarantor schemes for their students who want to rent privately. Even if your university does not have such a scheme, it will help to inquire if they have a partnership with a company that offers to stand as a guarantor for a fee.
Get in touch with your local council: If you are in dire straits and staring at homelessness, this may be your only option. Many local councils will act as guarantors and pay the security deposit for those in extreme financial distress.
Go for private rentals: If high street letting agents don’t want to assist you because of your adverse credit, consider approaching private landlords, who are more likely to accept tenants on personal merit.
Show you are good for rent with your proof of income: Offer to provide your bank statement or pay stub as income proof. If you can prove that you currently have a steady income, potential landlords won’t have so much of a problem with past credit issues.
Look for accommodation in shared houses: Your credit report won’t be a hurdle if you are just one of the several tenants living in a shared house.
Work on your credit score: This will not yield immediate results or help today. But in the long run, it can make a huge difference to your ability to secure a loan and rent a house. Check out our credit builder page for more info.