What Are No Guarantor Bad Credit Loans?
These are loans for which people with bad credit can qualify, even without a guarantor. A guarantor (also called a co-signer) is someone with whom you can co-sign a loan. Essentially, he or she is someone with whom you’ll be sharing responsibility for the loan. If you decide to default on the loan, your co-signer will be required to take your place as the borrower and pay it back; otherwise it will severely damage both your credit scores.
Payday loans are good examples of no guarantor bad credit loans. They are signature loans for which no credit checks are performed, making it suitable for bad credit individuals.
Small Bad Credit Loans
Payday loans have been around for a little more than a decade. Yet they’ve become quite popular because it is so easy to get them. People turn to payday loans (also called cash advances) for petty cash and even for emergency large-scale funding.
How do they work? The borrower simply has to meet a few basic requirements. The borrower needs to be at least 18 years old, which is the age of legality in most countries. He or she also needs to have a job with a monthly salary of at least $1000. Finally, to facilitate the loan process and repayment, the borrower needs to own either a checking account or a debit card account.
Some payday loans can only take about an hour to process. Normally, lenders ask borrowers to send in copies of their financial documents to support their claims on the loan application. Lenders who provide fast bad credit loans, instead, rely on Teletrack and FICO scores to measure the borrower’s ability to pay back the loan or to determine if he/she has filed for bankruptcy lately.
Interest Rates and Fees
Most payday lenders charge a fixed processing fee which will either be taken upfront or added to the final amount owed. If it’s upfront, the lender simply subtracts it from the amount that the lending company will wire to the borrower’s account. A legitimate payday lender never asks borrowers for fees before the loan is even processed.
Payday loans have one of the highest interest rates among various financial products. However, they are easy to manage as long as the borrower is makes sure to pay the loan once it matures (upon his next paycheck or a maximum of 28 days) to avoid getting trapped in debt.