The high street financial agencies in the UK offer the variety of financial products to help the people facing financial crisis because of any reason but the major barrier that turns most of willing borrowers towards the direct lending agencies is the ‘guarantee against credited amount’. The second reason that makes the private lending agencies a preferred choice of common man is the credit score because of all the mainstream banks and institutions take the credit score as credibility parameter. The ‘loans no guarantor’ is a highly searched term by the UK borrowers unable to arrange a guarantor or the pledge some asset.
Popularity of No Guarantor Loans for Bad Credit – The Reasons:
The bad credit score has become very common in the UK. Anyone can check the credit score online by self free of cost. The credit score 961-999 is classified as ‘excellent’; tough having this range of credit score is a dream for almost 70 % UK residents. The credit score about 500 is classified as good but the more common credit score rating in the UK is around 300– 500. Finding the guarantor, while having low credit score, is a challenge because no one would take risk of paying your debt in case you don’t pay. When one is applying for unsecured loan, it means he has nothing to pledge as the security against the loan amount. Online direct lenders understood this genuine problem of borrowers and came forward to help low credibility borrowers by providing ‘loans for bad credit no guarantor’. The bad credit unsecured loans suit to most of people looking for quick funds for a short period.
Reasons of Low Credibility of Borrowers in the UK:
The financial crisis may come unexpectedly because of different reasons; the more in common reasons are unexpected unemployment, low business season, delayed salary, emergency expense etc. Each failure in on time payment of dues builds up your bad credit history; it results in denials of loan application at major financial institutions, rejection at jobs, higher premium of insurance, difficulty in getting credit card debt etc.
By September 2017, the majority UK households had increased the pending debt since 2012. Since 2012 -2017, total household debt increased @ 7.3% because the average wages hike was just 0.7%; it is too low than the inflation rate during the period. Low hike in wages against the inflation rate forced the people stop monthly bills and let the bad credit history be mounted. Because of low income and growing uncertainty in jobs, the buying behavior also changed during the past couple of years; it forced numbers of business owners face finance shortage for paying the dues.
No Guarantor Bad Credit Loan- Is It Ultimate Solution:
If you are facing acute financial problem holding low credit score having no way to arrange a guarantor, no guarantor loans are good despite the high interest rate. It is the ultimate solution if you need a small amount help for a short period to say about 3 – 6 – 12 months. The ideal loan amount for no guarantor loan is the lowest with which you can manage the situation. Each financial help comes at a cost; therefore, before applying for short-term no guarantor loan, analyze the nature of requirement, realistic repaying capability, and the uncertainties you can face. Focus on – ‘Is the estimated cost justified?’ If you avail the required financial help from genuine direct lending agency at comfortable terms and conditions, it is the best way to remain stress free from the financial constraints and to focus on earning possibilities.