Why Lenders Still Want to Offer No Guarantor Loans Despite Many Restrictions?

The world is moving fast and everyone has no time to relax. Same thing happens to the individuals’ financial life. They try hard to keep balance between the regular and unexpected expenses, but fail miserably. And, when the situation becomes out of control, they cannot take too much time in finding out the solution. In fact, such thing happens not only to the people, the loan companies also have many challenges to go with the pace of time.

People expect more and more varieties of loans from the lenders, considering the fact of increasing financial problems. The impact of ‘Brexit’ has come massive on the UK and the locals here have no other choice, but to look at the loan companies. Thus, it is a huge responsibility of the lenders to come equivalent to such demands of the people and they have actually started working on it. For example, they are presenting no guarantor loans. The guarantor’s absence was assumed as the negative factor of the loan application, few years back. But now, it does not matter at all.

Since no guarantor loans are not the standard funding sources, the financial authority in the UK always look with scrutiny on those lenders, which are providing these sorts of loans. It has put lots of restrictions on the lenders, which may be related to the interest rates or other determining factors. Due to such restrictions, many lenders have given up such loans from their list of products, but few are still sticking with such claim.

It is very important to know the reasons why these lenders are still offering no guarantor loans despite of many restrictions imposed by the concerned authority. Here are the reasons:

Loans are given as the loans not as the special perks to the borrowers...

Anyone can question to the lenders, why they are providing loans even after the authority has not allowed them? It is indeed a valid question and deserves to have a genuine answer. The main reason is that the lenders are not providing loans as the New Year’s benefit or like any other perk to the borrowers. They keep them as the loans, which the borrowers can avail only after going through a particular application procedure. In addition, the lenders also keep the interest rates on the higher side to avoid any blame of becoming too much flexible for the borrowers.

Lenders have put other conditions for guaranteed approval on loan...

Loans cannot be offered without the specific conditions. The financial authority does not want from the lender to become too stringent in their loan terms, but ensure that they are providing genuine loan product. It is the reason why the lenders are requiring other factors like income status and credit scores for approving the loan applications. The borrowers have to fulfil these criteria if they want a complete financial assistance from the lenders. In fact, the completion of these requirements may enable them to avail loans for bad credit people with no guarantor.

Lenders have to be flexible to stand firm in the growing competition...

No one can deny the fact that the loan companies have their own interests in bringing such loan options. It is the reality of the marketplace, which forces them to compete with each other and to make loan product more flexible for the large numbers of the borrowers. As a result, they are ready to accept loans despite the borrowers’ bad credit scores or not having a guarantor. But at the same time, they want some kind of assurance of getting their money back, which they done through high interest rates or the collateral. Not only have the no guarantor loans, these lenders also done the same with other short term loans like the unemployed loans or bad credit loans. 

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Created on Dec 27th 2017 03:05. Viewed 901 times.

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