From the repair bill for your broken-down car through to a replacement refrigerator – there are lots of reasons why you might need to take out a personal loan. The trouble is, having bad credit can often make it feel like you’re fresh out of options. A considerable number of lenders insist that debtors with a low credit score have to find a guarantor, which can be difficult even at the best of times.
Fortunately, there are lots of options available to Londoners who need a little extra cash to tide them over – and we’ve set out some top tips that could help you to secure loans for bad credit with no guarantor required.
1. Review your credit report
First and foremost, if you want to stand the best chance of getting a loan, you need to understand what lenders see when you apply. Reading your own credit report will help you to understand how your financial situation looks on paper, whilst also giving you the chance to review the report for any errors that might have been included. Getting this corrected could cause your credit score to rise, and make it more likely that your personal loan application will be accepted.
2. Know your financial situation inside out
In a similar way, it’s only by gaining a thorough understanding of your own finances that you can hope to be accepted for a personal loan. For one thing, you should be careful not to overborrow, as doing so could seriously harm your chances of getting accepted.
Some experts suggest that you should never exceed more than 10% to 30% of your total credit limit – which means that maxing out all your credit cards could have a very serious impact on your ability to borrow money in the future. Keep an eye on how much credit you have at any one time, and ensure that you pay off what you owe as it falls due. As ever, prevention is the best policy when it comes to avoiding the challenges that come with a low credit score.
3. Be honest with lenders
Sometimes, borrowers hold back from applying for a personal loan because they’re concerned about what they’ll say to the lender. People worry about whether the reason they’re borrowing money will be good enough, and in some cases it can feel quite demeaning to have to explain why you don’t have the cash to pay for something upfront.
Luckily, many lenders aren’t too interested in the story behind your application these days. Whilst high street banks and other traditional institutions may still ask how you’re going to use the money, there are tonnes of modern direct lenders who are far more interested in whether you’ll realistically be able to pay back the loan.
If you are asked to provide an account of why you need to borrow money, it’s best to be honest. Lenders have seen and heard it all, so there’s really no need to be embarrassed.
4. Use an online credit broker
Whilst all of the steps we’ve mentioned so far could improve your chances of getting a personal loan without the need for a guarantor, there is another way. By using a credit broker, you’ll be matched directly with lenders who specialise in providing no guarantor loans for people with bad credit.
Reputable brokers like Little Loans make it easy to find the ideal short-term loan to suit your situation, and the lenders they work with are renowned for having very reasonable acceptance criteria. To make things even better, many borrowers who access credit in this way can expect the money to hit their account on the same day that they apply – making it the most convenient way to get your hands on some extra cash when you need it the most.
The best personal loan options for cash-strapped Londoners
These are tough times for everyone, and nobody wants to have to deal with unexpected costs on top of everything else that’s going on. Despite this, there are plenty of options available to Londoners who need to take out a personal loan yet have a poor credit score and nobody to act as a guarantor. With the strategies that we’ve set out in this guide, you’ll be better equipped to get a personal loan when you need – just without the drama.