The policies of the lenders matter a lot for the loan seekers because they will determine on which benefits the borrowers will get the loans. If we consider the banks, we can find out that they do not have enough space to bring their lending policies at flexible level. They are eager to follow the conventional terms and they are quite satisfied with them. On the other hand, looking at the direct lenders seems more practical because they are already presenting the loans on flexible terms and policies. If anyone wants to see the example, the loans without guarantor and no credit check are the perfect ones.
The guarantor’s acceptance of the loan repayments on behalf of the primary borrower has been one of the main requirements of availing a financial help. It also has several kinds of benefits particularly the low-interest rates. The loans without guarantor are crucial for those individuals, who have tried hard but unable to find out a person to become their guarantors. Instead of being denied, they can apply for these funding sources and get the help as per their desires.
On a similar basis, the poor credit record or the lack of a credit profile has also one of the main reasons for applications rejected. The direct lenders or the online loan providers have brought a new concept that comes in the form of loans with no credit check. It means the borrowers still have the opportunity to borrow funds despite not having a good credit score.
Both these loans represent the element of Fintech Market in the UK. However, the question remains, why the lender is so keen to offer loans without such obligations? Let us search out the reasons:
The Curse of High-Interest Rates
The possibilities are always there with the options like no credit check loans and no guarantors. But there is also a risk of the high-interest rates. When the borrowers fulfill each obligation to borrow funds, the interest rate will come automatically low. Due to some specific compulsions, few people are not able to accomplish everything to apply for the loans. These sorts of loans do provide an ideal alternative, but the interest rates will remain high. Nevertheless, benefits are also there that cannot be denied.