Loans without guarantors can appeal to thousands of potential borrowers as the search for the perfect loan continues. However, there are many who think a no guarantor loan comes with hidden agendas and that these loans will be far costlier than a guarantor loan. It’s easy to see why so many people think this way but sometimes no guarantor loans are misunderstood! Maybe, it’s time you learned more about a no guarantor loan before you make a decision as to whether this is the right loan for you.
What Does No Guarantor Loans Really Mean?
Borrowers do not necessarily have to have someone to be a security or safety net for the lender. In a sense, there is no need for a guarantor when applying for this loan. That can be an ideal option simply because having a guarantor is not always easy. What’s more, loans without guarantors really mean no guarantors needed. However, you can choose between a secured or unsecured loan (without any guarantors or co-signers). What you do have to remember is that even though there isn’t a guarantor you can still get one of these loans with bad credit or great credit. Of course, when there is poor credit involved, it will be tougher to get the right loan but not impossible.
Secured and Unsecured No Guarantor Loans Can Require No Guarantors
Guarantor loans are usually classed as secure simply because there is a guarantor in which the lender can fall back on but with a no guarantor loan, they can be both secured and unsecured. Secured can mean putting up some form of collateral rather than having to have a guarantor which can help secure the loan faster. Of course, they aren’t always necessary. Unsecured no guarantor loans can be far ideal because you do not need a guarantor or any security such as putting a home up as collateral or a vehicle. Loans without guarantors don’t require security or guarantors which can be ideal for most individuals.
What Happens if You Default on Payments?
Just because there isn’t a guarantor to go after for the payments that doesn’t mean to say you’re off the hook! Without a guarantor to fall back on, the lender (if you fail to pay the loan entirely, i.e. default) you can still be sued or taken to court in efforts to recoup the money. Some lenders will pass the loan off to a collection agency or pursue a judgment against you in court. If the lender is awarded a judgment, it might mean the court attaches an amount in which is paid directly to the lender to offset the loan. Garnishing wages is a popular move for most courts which is why loans without guarantors should be paid. You can ruin your credit by defaulting and if you do have issues with payment, talk to the lender and hopefully you can work something out. It’s a lot better than defaulting and going to court.
Understand a No Guarantor Loan
Before you think about taking out a no guarantor loan, it would be wise to take a moment out to think what these loans can offer you and whether or not they are really right for you. Having no guarantors needed, can be ideal and really it can enable you to get more help financially without having to tell someone your business. Loans without guarantors can be ideal for most individuals.