It’s no secret that money is tight these days, and as a result – we might need a little helping hand from time to time. Therefore, you might decide it’s a good idea to apply for a same day loan.
Maybe this is because you have an urgent financial problem, or maybe you’ve decided at the last minute to go on holiday. Whatever the reason, you’re looking for a loan.
However, not everyone has the ability to use a guarantor, and some people don’t want to burden someone with this sort of responsibility.
So, what happens if you want to apply for a same day loan but you don’t have a guarantor? Our guide explains everything you need to know.
We’re going to answer all of your most important questions. Ready to learn more? Then read below!
What Is A Same Day Loan?
A same day loan, as the name suggests, is a loan that you apply for and receive your requested money on the same day as your application.
Typically, after acceptance of the loan terms and conditions, you will receive your money in minutes – but it could take hours.
There are generally two types of same day loan; payday loan and instalment loan.
Let’s look at both of these in more detail.
A payday loan is a specific type of unsecured loan that allows you to apply, normally for a smaller amount of money and pay off the balance on the date of your next payday.
Due to their convenience, the interest rate tends to be much higher than other types of loans.
Payday loans can be very useful for some people if they need a little extra money before their next payday – however, it’s very important to note that you need to check the interest rate.
As these interest rates can be very high, you may find yourself in financial trouble the next month and perhaps might need to apply for another payday loan.
Instalment loans are another type of unsecured loan that usually allows you to apply for a larger sum of money, but gives you the option to pay off the balance in monthly instalments. This allows you a little more flexibility than payday loans do.
Once again, it’s important that you pay attention to the interest rates and the duration of your loan agreement.
Often, instalment loans can be very useful – but sometimes they can become a financial burden.
What Are The Advantages Of A Same Day Loan?
There can be plenty of advantages to getting a same day loan.
Let’s take a look at some of the most common:
Perhaps the most obvious advantage of applying for a same day loan is that you can get the money you need on the same day.
This means that if you’re stuck with an emergency bill such as your boiler breaking down, car trouble or urgent medical bill, you can pay ASAP.
Of course, there are other options out there – so be sure you’re aware of all of them before you formally accept a same day loan.
Some loan applications can become very long and complicated, particularly with financial institutions like banks or building societies.
However, with same day loans – as the idea is to receive money fast, you’ll find the application process to be very quick and easy.
You will find that there are many lenders out there that will offer this type of loan, so you usually have the ability to shop around for the best rates – especially if you have a good to excellent credit rating.
What Is A Guarantor?
A guarantor is someone who “guarantees” payment of your loan, in the event that you as the borrower defaults on their credit agreement.
Typically, the lender will try to contact you directly before they speak with your guarantor.
However, if enough time has lapsed – the lender will contact your guarantor.
Ultimately, the guarantor will then become responsible for the payments and this can affect their credit rating too.
Guarantors can be useful for credit applications because the risk to the lender is reduced.
This is because they have two ways to receive their money back – and normally guarantors have to be homeowners, meaning they are likely to be financially responsible.
Why Might You Avoid Using A Guarantor?
As we said in the previous section, guarantors become financially liable for your debt in the event that you cannot pay or refuse to pay.
Due to the fact that guarantors tend to be friends or family members, this sort of stress can cause a relationship to break down.
In fact, due to such a huge financial burden – the guarantor must have a massive level of trust in you to agree to a guarantor loan.
When it comes to same day loans, the interest rates can be high – meaning that these two factors can make it difficult to find a guarantor.
How To Apply For A Same Day Loan Without A Guarantor
The application process for a same day loan without a guarantor is pretty simple. Essentially, you need to make a formal same day loan application with a lender.
First, you will need to research what lenders offer same day loans and check their interest rates and fees carefully. Next, ensure that they do not require a guarantor.
If your credit rating is very low, you might find it difficult to be accepted without a guarantor though – so be aware of this if you’re in desperate need of money. You may be better off seeking other financial solutions.
The Bottom Line
Same day loans without using a guarantor can be useful, but remember that if you have a low credit rating, you could find it difficult to be accepted without one.