How to Get a Loan without a Guarantor

In an ideal world, we should be able to go to the bank, submit our paperwork, and receive approval from them almost immediately – without any other detours. However, we live in a world that is not so ideal, where not all of us have a stellar credit score, and not everyone can guarantee a high-income job in the paperwork. In this case, you have no way to guarantee that the bank will have coverage in the event that you default on the loan.

That being said, this can be solved with many lenders by bringing in a guarantor – but likewise, not many people have a person that can vouch for them that way. For example, if you are an immigrant on a visa looking for a loan, you might not know someone that can sign for you. You won’t have a person that can take responsibility in the event that you default on the loan – in which case, you might want to get a loan without a guarantor.

What Is a Guarantor?

A guarantor is generally referred to as a cosigner – someone that will take responsibility for paying back the loan in the event that you fail to do so. Since banks prefer to work with individuals that are reliable and financially responsible, it makes sense that you will have to fit some kinds of standards.

As a result, if you have a low income, your credit score is poor or your credit history doesn’t paint you in such a good light, there is a good chance that your application might be rejected. This generally happens to students looking for a loan, but also working adults. Considering that only in America, 30% of the people have bad credit, it might be difficult for them to get a loan – mostly because they are portrayed as unreliable.

In this case, the financial stability of a guarantor will make the lenders feel safe – mostly because if you bolt, they will at least know they’ll have someone to go take the money from. When a guarantor signs with you for a loan, they will take responsibility for the payments in the event that you fail to do so.

That being said, sometimes it might be a great challenge to find someone that will cosign on a loan with you – which means that you might have to get creative. Luckily for you, even if you are in an impossibility to get a co-signer, there are still ways for you to obtain financing. 

Are No Guarantor Loans the Same as Payday Loans?

This is actually quite tricky to answer because the answer is yes and no. In fact, we would say that payday loans are only a small branch of loans without a guarantor – but not every no-guarantor loan is a payday loan. You can find out more about these loans by following this link. These loans have a bad reputation for a reason, which is why you might want to look into more options.

Other Types of No Guarantor Loans

A payday loan might be a good option if you know for certain that you can handle the quick payment and high interest rate. However, if you do not want to enter an even bigger circle of debt, you might want to check into other loans as well. Here is what you might want to go for.

Personal Loans

Like their name suggests, a personal loan is the kind of loan that you take out for personal reasons. Unlike mortgages, car loans, or business loans, the lenders do not ask for a reason – they just want to know that you can pay your money on time.

Ideally, you should have good credit or stable income if you want assurance that you will receive your personal loan. However, in the event that you don’t have either of those, you may also find lenders that offer no credit check loans. However, you may want to prove to them that you have the possibility of paying back the loan – despite your not-so-stellar credit rating.

Peer-to-Peer Loans

If you have no luck with personal loans, then you might want to try peer to peer lending. With this type of loan, individuals and private investors (as opposed to the workers of a bank) will lend you money through an online medium.

Simply put, a peer-to-peer service is generally a website where borrowers and lenders are matched, making the process much easier for every party involved. They also generally have better rates – but you should also do quite a bit of research, as they tend to be very competitive.

Why Do People Look for Loans without Guarantors

In most cases, when people go for a loan without a guarantor, they do so because they do not have anyone to cosign for them. Let’s say that you have just arrived in the United States, and your workplace requires that you get a car loan so that you can arrive easier to work. In this case, you might not have enough friends in the United States that can vouch for you – so, you might have to look elsewhere.

What to Watch Out for with No Guarantor Loans

To put it plainly, when you are looking for a loan with no guarantors, you need to learn how to avoid loan scams. When you are looking for a loan without a cosigner, you might come across illegitimate offers from people that want to take advantage of your desperation. The following aspects might actually be a sign that the loan you are interested in is actually a scam:

• The loan is being offered only via phone call
• You cannot seem to find any physical address for the lender
• The lender doesn’t have the registration to operate in your case (you might want to verify with your state’s attorney general office)
• You are being asked to send money into a personal account

Similarly, while a legit no-guarantor loan will not take your credit history into account, they will still show some interest in it. Watch out for those that care more about your personal data than your credit information.

Should I Apply for a Loan without a Guarantor?

If you do not have a cosigner, then a loan without a guarantor might actually be quite convenient for you. Granted, to get a good interest rate, you might want to make sure that your credit score is in good shape – but even if that one is on the lower side, you may still find lenders willing to work with you. Bear in mind that these loans might only be a good solution if you have a stable income source.

How to Apply for a Loan without a Guarantor

Getting a loan is very easy, particularly if you find a flexible lender. With Stilt, the process is as follows:

• Submit the application: Provide the documentation proving that you are eligible, and within 24 hours, you should receive an update.
• Get an offer: Once your documents have been reviewed, you will get a promissory note that you’ll have to sign. The money should arrive shortly in your bank account after that.
• Repay the loan: After you received the money and used it the way you intended to, all that is left for you is to begin making your repayment upon the scheduled time.

As you can see, the process is not difficult. In most cases, you should have the money in your account within two days.

Final Thoughts

It might seem difficult to get a loan without a guarantor – but in truth, it isn’t. You simply have to work with the appropriate lender and take all your options into consideration.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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