Dos and Don’ts while Looking for No Guarantor Loans


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Various online lenders are out there offering no-obligation loans. This means you do not have to arrange a guarantor or collateral to secure the loan. As long as you have a repaying capacity, you can qualify for the loan. Loans advertised as “no obligations” are most commonly known as no guarantor loans, in other words, and generally target borrowers with bad credit. Since lending firms have already simplified their financial products into secured and unsecured loans, it is implied that the term “no obligation” emphasizes no guarantor.

If your credit score is not up to scratch, you cannot borrow money from banks or mainstream financial institutions. As a result, you turn to online lenders. Although various lenders can sign off on your application, even if your credit report is not up to par, it does not mean that you do not need to do homework. 

You should consider various things before applying for these loans. Otherwise, you will end up falling into a debt trap. These loans seem to be very attractive because of no obligation tag, but it does not mean that you can escape from payments. This blog discusses some dos and don’ts while looking for these loans.

Do explore other options

The first thing you need to do is to explore other options. Before you turn to a lender, you should ask your family or friends if they can offer you some help. A rule of thumb says that you should check your savings account to see if that can fund your needs.

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If you do not have enough savings, you should ask your family or friends for financial help. Undoubtedly, funding from informal sources will help you save a lot of money on interest.

To convince your family or friend that you need money for genuine and urgent reasons, you should have some proof and tell them how soon you can pay off the loan. They would like to know it before lending you money.

Don’t succumb to desperation

No matter how affordable a loan deal is, you pay the interest along with the principal. It is crucial to look over your repaying capacity to avoid the risk of falling into debt. Fast loans with no guarantor are short-term loans generally taken out to meet small emergencies. This is why the term of these loans is very small, not more than a month.

You can find such loans extremely affordable because you are to pay off the loan in a lump sum, but if you fall short of money, you will have to get them rolled over and as a result the late payment fees will be charged and this cycle will continue to spiral up if you do not settle the whole of the debt.

This is why it is advisable that you should borrow money only when you need it urgently. Just because you do not have enough money to buy you something does not mean that you will run after online lenders. As a sensible borrower, you should analyse if you actually need it or you can live without it.

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You must find out the difference between needs and wants. If you think that you cannot live without it, you should take out a loan, but if you find that you can make do without it, you should drop the idea of borrowing money.

Do calculate your affordability

Although a rule of thumb says that you should borrow money only when necessary, you should never forget your affordability. For example, your laptop has broken down, and you need to get it repaired as it hinders your office work.

You will have to quickly arrange money to get it repaired if your savings are nil or insufficient. You may find loans with no guarantor a more convenient option in this scenario but wait.

Have you checked your repaying capacity? Are you sure you will be able to pay back the loan on time? If you suspect that you may fail to pay off the loan, you should not borrow money.

Whether you need money for an emergency or an everyday need, you must check your paying capacity. You should not borrow money if you cannot afford to pay back the loan.

Don’t get an expensive offer

Non guarantor loans are not a type of a loan. They are short-term loans that do not require a guarantor. Each lender offers different types of small loans at different terms and conditions. It is essential to carefully look over the deal before signing the agreement.

Some lenders may offer you payday loans. Be aware of such loan deals. APR of these loans is generally much higher than other emergency cash loans. A few lenders are out there offering these loans in instalments. Based on the amount of the loan, instalments can be weekly, bi-weekly and monthly.


Try to borrow money from such lenders. Paying down the debt in fixed instalments is far easier than paying the whole of the debt in a lump sum.

The bottom line

Whether you are applying for a loan with no guarantor or a secured loan, you should always be cautious of your paying capacity. Although small loans do not involve security, there are still things to lose if you do not pay back the debt on time. Your credit score will go down, which restricts your chances of borrowing money down the road, and you may also fall into a debt spiral. Check your affordability before borrowing money, so you do not rue the day in the end and try to borrow money from a reputed online lender that offers these loans at the lowest interest rate.

Description: Are you looking to take out a no guarantor loan? This blog discusses some dos and don’ts.