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  • June 8, 2021
  • Leo

A No Guarantor Loan

A guarantor is a person who facilitates a borrower in qualifying and getting a loan. The role of the guarantor comes in when the borrower has a poor credit history.

For any reason, if the borrower is unable to pay back the loan, the guarantor takes the ownership and is held responsible for the payback of the loan. Basically, a guarantor plays the role of a co-signer.

The role of the guarantor continues until the full repayment of the loan amount. As contradictory to the borrower, the guarantor has a good credit history and is considered reliable by the lenders to offer a loan to the borrower.

Guarantor and its Concept

The concept of the guarantor is not new and heads back to ancient times. The involvement of a guarantor was a normal concept in past times when the lender did not have access to the credit rating and the payback capacity of the borrower.

Unlike today, when the lender has every access to the payback capacity and credit score of the borrower, previous times were different.

Guarantors are generally family relatives or friends who know you and are in a state to guarantee your borrowing. The guarantor secures the borrower’s loan, including any car loan, home loan, or a loan for any significant expenditure.

If the loan is paid back on time by the borrower and with the proper interest rate, there is no role of the guarantor in the whole process.  

Sometimes, we can be out of funds in the middle of the month when there is a pending list of expenses. The expenses differ from person to person.

Salaried individuals may face financial constraints at times due to limited and tight financial situations. There may arise any emergency which may become difficult to cater to towards the end of the month.

Many lenders help such people in need by providing finances and asking for a guarantee in return, which is where the role of guarantor comes in.

Many people prefer the option of loans with no guarantor as it is an easy option to consider and is easy to apply. However, with the guarantor being involved, if the borrower cannot pay back the loan on time, the guarantor is also being put at risk.

No guarantor loans are of two types, i.e., Short term no guarantor loan and long-term no guarantor loan. Thus, there are two sides to everything: pros and cons too attached with no guarantor loan.

You may find it lucrative to fulfill your financial needs, but it is important to weigh both pros and cons of no guarantor loans to proceed further:


No Guarantor loans act as a savior in case of urgent financial need. These loans are handy and instant. Here are few advantages to them:

1. Quick Process

Unlike other loans such as car loans and home loans, loans with no guarantor do not require any tedious process and documentation.

The documentation process is quick and straightforward. First, you have to fill up an application and your essential documents for your identity, income, and address proof.

Once your documents are checked and verified, the loan will be granted. These loans are also known like same day loans in the UK.

2. Choices available

Loans without guarantors are also termed unsecured loans. Plenty of options are available to choose from. You may select a product at your convenience.

Having more options is always good to choose the best suitable for you.

3. Convenient and easy

You have to submit an application form that is duly filled with your documents attached. Then, the lender receives your application and carries out all the necessary verification.

Once all the checking is done, the lenders instantly decide and display your loan status. The process involves less amount of time that acts as an advantage for the borrower.


Like the two sides of a coin, there are cons too attached to loans without a guarantor. Below mentioned are few cons:

1. Credit Score at Risk

In case of no guarantor loan, your valuables are not at risk. The only thing at stake is your credit score. However, due to non-payment of the loan, your credit score may be affected severely.

This may significantly impact your future borrowing as you may be restricted from any borrowing in the future.

2. Prepayment fine

The terms and conditions of every loan are different and depend on the type of lender. Paying back a loan on time is considered an advantage for you.

You may wish to pay back your loan before the stipulated time, but some lenders may charge a fine for your prepayment. Hence, it is essential to read and understand all the terms associated with the loan contract.


A loan for bad credit with no guarantor can be beneficial for you , but it is essential to check all the repayment terms. In case of poor credit, these loans are helpful to opt for.

But, before borrowing a loan, you should always be clear with your repayment strategy, and these loans can prove to be a savior for you.

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