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Stilt - Loans for immigrants and the underserved
6 months ago
How to Get a Loan without Guarantor

How to Get a Loan without Guarantor

Getting a loan is never easy. But for some people, it might be more complicated than for others. This is primarily why many banks and lenders request a co-signer. But what if you don’t want to use a cosigner to enhance your odds of getting your application approved? Or what if you don’t have this possibility? In this scenario, you can always look for a viable loan without a guarantor – which is what we’ll talk about today.

What Is a Guarantor?

A guarantor is basically a co-signer – a person that takes on responsibility for repaying the loan. It makes sense that lenders and banks want to collaborate with reliable, financially responsible individuals. This is why, due to impediments such as lack of credit history, or a poor credit rating, your loan application might be dismissed.

Low income might also be an impediment to getting a loan without a guarantor. In this scenario, if the financial situation of the co-signer or guarantor, is stable, and he/she takes on the responsibility to handle the repayments, the possibility of getting financing increases.

When you sign a loan with a guarantor, you basically adopt the financial profile of the other person. Also, the chance of obtaining more convenient rates and loan terms grows.

On the other hand, as a visa holder in the US, finding a co-signer that would agree to take on responsibility could be an immense challenge. The good thing is that you can still get a loan without a cosigner, whether we are talking about an auto loan or any other important purchase you might have in mind.

Are There US Loans without Guarantors?

Yes, you can still get a loan without a guarantor. Although a guarantor can significantly help you in qualifying for a loan with convenient terms, this is not always a possibility. This might be a relief – in the position of a visa holder, finding a person that would be willing to cosign a loan with you might be difficult, if not unachievable.

But usually, only some lenders are willing to collaborate with people in this scenario. For the most part, the greater majority of banks are reluctant to do so. This has to do with a higher degree of risk.

Concurrently, you should do your research prior to choosing a loan without a guarantor. Since online lenders are mostly willing to supply this form of financing, you should compare different alternatives before making up your mind.

The truth is that there can be significant discrepancies between interest rates and loan terms. That is to say, some lenders might offer more convenient deals for the same loan without a guarantor. This is why you should take your time as opposed to making any hasty decision you might regret later on.

3 Reasons Visa Holders in the US Need Loans without Guarantors.

As a visa holder, this means that you are new to the way things work in the United States. Considering that you’ve probably been here for a relatively short period, this means you didn’t have a lot of time to build a credit history.

In addition to that, as an immigrant, the odds are that you haven’t established any strong, durable relationships with people that would be willing to act as guarantors. Basically, a guarantor must be a person with an excellent US credit history. Concurrently, they should be willing to take on a lot of risk for you.

With that in mind, we’d like to mention three of the most common reasons why visa holders might need financing without guarantors.

1. Pay Off Education Loans Back Home

Let’s say that you’ve just started working in the US. In this case, you might not have the financial resources to cover the cost of education loans you’ve taken back home. The truth is that most students rely on financing for dealing with the expenses of higher education.

The costs of higher education in the US are significant and this forces students to take student loans – but the same goes for other countries. Nevertheless, this varies a lot depending on the law system and the way in which the educational system is laid out.

With that in mind, if you’re only on your first job in the US, you most likely need a loan without a guarantor, as your ties to the country aren’t that deep just yet.

2. Fund a Wedding for a Relative

Weddings are complex, pricey affairs, meaning that one must have significant financial resources to cover all the costs. And while a wedding is a unique event in the lives of the happy couple, it might be a financial burden. This is primarily why many relatives offer to provide help.

In this case, you might get a personal loan without a guarantor for a wedding overseas. And while it is true that not all lenders might approve your application, some lenders – Stilt included – are willing to work with you.

3. Invest in Property Overseas

Another common scenario is to invest in property overseas. There are many noteworthy reasons why this idea might seem attractive to you. Investing your money wisely could provide a means of revenue for the future. Not to mention that it might give you the chance to retire earlier than planned.

How to Get a Loan without a Guarantor with Stilt

We’ve already said that Stilt has more flexible loan terms for immigrants that don’t have a guarantor. In addition to that, the lending process is simple: you don’t have to worry about complicated, lengthy forms or anything of the sort.

Submit your application

This is, evidently, the first step to getting a loan. And Stilt makes it very easy and time-efficient. If you’re in need of a loan without a guarantor fast, you should be happy to learn that in roughly 24 hours, you’ll get an updated from us.

Get an offer

Afterward, you’ll receive an offer. But before you get hold of the money, we will need you to sign a promissory note. Once you do that, the money is directed to your bank account. In no less than three business days, it should enter your account.

Start repaying the loan

After using the money as you intended in the first place, you can start making the repayments. If you do have the means to repay the loan earlier, the good thing is that Stilt doesn’t charge prepayment penalties.

5 Ways to Improve Your Chances for Approval on a Loan without Guarantor

If you cannot use a guarantor in order to make your loan application stronger, there are still some things you could do to optimize the likelihood of getting a loan without a cosigner. These apply especially if time isn’t rushing you to get a loan right away.

1. Build Credit

This is probably the one thing that will enhance your chances the most. As an immigrant, the odds are that you don’t have a credit history, which is pretty much the equivalent of having poor credit. It is unfair, that’s accurate, but that’s the way things are.

What you could do in this respect, to make your credit rating better, would be getting a small loan. By responsibly making the repayments on a regular basis, you’ll display a responsible behavior that will make you a more trustworthy borrower.

2. Borrow Less

If you could borrow a smaller sum of money, perhaps you should try this approach as well. Depending on the amount of money you want to borrow, the loan terms will differ. You could always use a loan calculator to assess what would work best considering your income and financial situation.

3. Expand Your Search

If you’ve been rejected several times by conventional banks and lenders, perhaps it’s time to diversify your search for a loan without a guarantor. Online lenders and credit unions are more flexible when it comes to their loan terms and they might be willing to collaborate with you.

4. Use Collateral

In case you already own an asset, you could use it in order to maximize your chances of getting financing without a cosigner. Although this might come with the risk of losing your asset if you don’t repay the loan, it can help you if you need money fast.

5. Pay down Existing Debt

This applies especially if you already have debt. In this case, you should focus your attention on reducing your debt. This will have a positive effect on your credit score.

Of course, this solution applies to you if getting a loan isn’t an urgent matter and you could wait a while.

To conclude, as difficult as it may seem to get a loan without guarantor, it doesn’t have to be this way. When you work with the right lender, things are much simpler. This is why you should always take the time to consider various alternatives before giving up.

For more information please follow the link below.