The widespread pay cut, layoffs, and inflation have heightened the risk of loan defaults. To prevent the number of defaults, lenders optimize their policies. Amid the current economy, lenders find it challenging to exercise flexibility in lending. It is why individual borrowers face a hard time securing loan approval from traditional lenders.
As experts believe, stringent loan policies will help reduce loan defaults and protect lenders and people’s credit. However, a situation calls leads to a chain of unexpected events. It could be anything from – exhausting savings, financial saving pot, emergency pot, and lost investments. It is the most unfortunate event.
This situation provokes one to take out quick loans in Ireland. However, getting one with no guarantor becomes challenging if one lacks assets or credit score.
Who is a Guarantor and Why You May Need One?
Calling in a guarantor seems ideal in case one needs to borrow a huge sum urgently at a less-than-ideal credit score. Here the borrower emerges as a risky one to the lender.
In the wake of ensuring a guarantee over the loan, lenders ask for a guarantor. In this case, it is in the form of a person. A guarantor is someone you know better and share a deep bond with. They could only be a family member that could help you support to get the loan.
However, how can one bridge this gap if one shares short-term money requirements with bad credit?
No-guarantor loans.
What does a no guarantor loan imply?
A no guarantor loan does not require a third person on loan as an obligation to get the loan. Instead, some lenders provide loans without one. These loans are sometimes called unsecured loans. It means it does not call for collateral on a loan. It is only in the case of short-term loans.
In the case of long terms, if a lender doubts a borrower’s affordability, he may ask for a guarantee on a loan in the form of collateral or an asset.
To qualify for this, one may need a good credit score. In the former case, having a guarantor on the loan reduces the risk of defaulting and eases the burden off the shoulder.
However, if you fail the loan, the lender may recoup it from the guarantor, which may affect the relationship between the two. In opposition to this, private loans like no guarantor loan eliminate any such dangers in Ireland. If you have a tangibly good credit score, you may qualify.
.Who can qualify for a no guarantor loan?
Every lender shares unique criteria for providing loans. For example, if you need short-term money assistance of €3000, you may qualify at minimal income. In opposition, to qualify for a no-guarantor loan, you may need the following:
a) Incredible credit score
You must host a positive credit report and score if you wish to apply for a higher loan amount like €25,000. Doing so eliminates every possibility of having a guarantor on loan, in a reverse case like if you want to take out quick loans in Ireland. You can get it with no guarantor. You do not need a stellar credit score for up to €3000. The lender shares flexibility in the case and provides loans for urgencies with quick payouts.
b) Employment history
You must host a good income to qualify for a no-guarantor loan. It is both for short-term and long-term borrowings. Good income proof may save the day if you do not share a credible credit score. You may qualify for a flexible amount hosting slip of income. However, the income qualification criteria may differ from lender to lender.
c) Repayments
While qualifying for short-term loans may seem the most flexible, it entails risks. Engaging in loan repayments arrears affect your credit score, and defaulting may affect your future borrowing prospects. Thus, go for no-guarantor loans only if you are left with no other better option.
Likewise, the lender considers the debt-to-income ratio before agreeing upon the loan amount in the longer term. If you have disparities between incomings and outgoings, the lender may reject the loan or call for a guarantor or a personal guarantee over the loan.
If you ever find yourself stuck in the debt repayment cycle in the case of long-term loans, call a lender. Discuss the financial issues you are facing and seek an apt solution to your problems. In this case, the lender may revise the loan terms and help you spread the loan cost or reduce overall interest rates. It entirely depends on the lender you are engaging with.
We here help customers ensure the right balance between budget backup and comfortable repayments in both cases.
d) CCJs
County Court Judgements (CCJ) is a notice that a lender issues if a borrower defaults on payments. It issues a court order to get the payments legally. When a borrower has a CCJ, he may not qualify for a loan for seven years. Here, applying for private loans in Ireland, like a no- guarantor loan, are 2 scenarios.
In case of loan-term no guarantor loans on bad credit, you may have to wait until you run clear of CCJs. The reason is that the law legally prohibits it.
One cannot qualify for a long-term loan with CCJ if the situation is not serious enough. In a short-term loan, one can qualify for a no-guarantor loan with a CCJ if one has a good income and improved credit behavior lately.
How is No Guarantor Loan Beneficial?
Borrowing without a guarantor may help you maintain your financial balance and eliminate dependencies on the third-party GUARANTOR. Here are some advantages of a no guarantor loan:
1) Simple and quick solutions
A no guarantor loan with a quick payout could be an option if one needs a short-term loan. It requires no collateral, and one can get it within 15 minutes.
2) Lower APR
If a borrower maintains repayments responsibly, it eliminates the risk for the borrower and the lender. Likewise, it reduces the APR on loans.
If you have bad credit, always apply for low-interest no-guarantor loans.
Bottom line
No guarantor loans are the go-to alternative for one who lacks a credible credit score. However, one must ensure appreciative income proof to qualify for the loan. You may get these private loans in Ireland for short- and long-term needs. Contact us to know more.
Caleb works as a senior content writer at Financealoan for the past 3 years. He is a writing enthusiast and invests a good time in exploring and writing about financial trends. His keenness in exploring a topic to create a research-based piece is simply unmatched. He believes in including a texture of authenticity with real-time examples and facts.
Caleb’s blogs and articles reveal deep-seated knowledge and expertise. His educational qualification forms the base of his excellent command over the industry and Jargon. He is a postgraduate in Finance and is currently involved in exploring the world of the stock market.
