Short Term Loans Bad Credit No Guarantor: A Brief Guide

No one wants to be in a situation where one needs to apply for a loan, that too for bad credit. But c’est la vie. Sometimes life hands us with a basket full of thorns instead of roses. However, there is a silver lining somewhere. You can now work and rebuild your credit and perhaps be able to get out of bankruptcy. Several banks/lenders offer short term loans with no guarantor for people with bad credit.

What does bad credit mean?

We need to first understand the concept of bad credit. It is bit tricky because what could be a bad credit score for one lender may not necessarily be a bad credit score for another. Your credit card and other loan payment history basically define your credit score.

Credit scores are usually used to determine:

• What the rate of interest will be for a loan they may offer you
• Whether your credit limit should be increased or decreased

Usually a score below 600 qualifies as bad credit. When you haven’t paid your credit card bills/loans in a while or maybe not paid them at all, you know you’re heading down this road.  Get your credit report to know where you stand.

What happens when you have a bad credit?

Unfortunately, this is a grim situation. Application for future loans (house, car, business, anything) becomes difficult, as lenders usually have your payment history. You could face difficulties in other aspects too, such as: landlords could ask you for a significantly higher deposit (if you are staying in a rented place that is); certain phone companies may ask for a security deposit and sometimes it could even affect your employment options. Life basically becomes really difficult.

What is a short term loan?

It’s a loan which needs to be repaid within a short period of time. Usually people apply for this in times of financial emergency.

Short term loans bad credit no guarantor: eligibility

A lot of lenders are now giving the option of taking short term loans without a guarantor, for those with bad credit. The requirements are generally simple:

• You need to be above 18 years
• Hold an active bank account
• Have a job with a minimum taxable income

Short term loans bad credit no guarantor: advantages

• If you are eligible, the process of application is simple and easy. Usually it’s an online application. All you need to do is fill in your details and apply. For short term loans, often no credit check is required.
• Since most people apply for short term loans due to some emergency, you could get an approval within a few hours!
• No guarantor means no collaterals/assets need to be provided for the loan.
• Several lenders offer the option of extension of deadlines and rollovers.
• On-time payment of monthly installments could mean you could be eligible to better your credit score.

Things to remember for short term loans bad credit no guarantor:

• Do your research. There are so many lenders offering short term loans that you need to be sure you’re applying for one that suits you, doesn’t charge you an application fee, or generally have hidden charges. In our hurry, we often don’t read between the lines.
• You will need to make a minimum payment, each month, usually for five months before you are eligible for a credit increase.
• Lack of repayment within due date could lead to an increase in interest rate and this should be avoided especially if you already have a bad credit score.

A bad credit situation could happen to anyone, anytime. Do not despair. Your hard work, perseverance and these short term loans could help you to pull yourself out of this situation and you will eventually (hopefully) be debt-free!