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Whether you are a first time borrower or a returning customer, Loan Broker is always your trusted friend.

Here is some free professional advice to help secure and enhance your financial future.

Can I borrow no guarantor loans on benefits?

Can I Borrow No Guarantor Loans on Benefits?

Unforeseen expenses can easily agitate your finances. If these expenses are hefty, shelling out money from your savings may not be wise. Personal loans can help you get through the rough patch, with affordable monthly instalments over a fixed period. With a personal loan, you won’t have to exhaust your savings, and you’ll have some time to stock up some money to pay off the loan.

A personal loan is unsecured, meaning it does not require collateral security against the loan. However, if you are looking to borrow money with a low credit score, lenders may ask for a guarantor – a Guarantor loan.

However, it isn’t always feasible to involve family and friends in your finances. In such cases, it is better to opt for a personal loan without a guarantor.

In this article, we’ll learn more about what no guarantor loans are and how you can get one if you’re unemployed.

Can I get a loan on benefits (no guarantor)?

A guarantor is a close friend or member of your family who partakes in a loan’s obligations with you. Guarantor loans are ideally meant for low credit score applicants. Lenders ask for a guarantor to co-sign the loan agreement with the borrower to reduce their risk proposition. Now, if the borrower fails to keep up with the repayments, the onus of repayments will fall on your guarantor.

Most loans are loans without a guarantor. Personal loans, secured loans, home improvement loans, short-term loans, or title loans, per se, won’t require you to get a guarantor on board. No guarantor loans help low credit score borrowers avail of credit without a guarantor, albeit at high-interest rates.

However, not all of us have a guarantor to co-sign our loans. Or, you simply might not want to add a third person into your financial equation. In such cases, no guarantor loans are ideal. A no guarantor loan is, essentially, a personal loan wherein you don’t need collateral or a guarantor.

No guarantor loans usually have higher interest rates than secured loans. But just how high these rates can get depends on your credit score. Your credit score is an integral part of the loan application. It helps the lender determine your creditworthiness and assess the risk of lending your money.

Another salient factor that drives the result of your application is your income. An income statement helps the lender assess your repayment capability. Now, if you’re on benefits, it’s probable that you’re currently unable to find work, meaning that your income is limited to the benefits that you receive each month. This might affect your application.

Even if you get approved, the terms associated with the loan may be unreasonable. The interest rates for such loans are higher than most forms of credit, such as a personal loan. So, while you may be eligible to apply for a no guarantor loan as a benefits claimant with some lenders, there’s no guarantee as to whether or not the lender will approve your loan.

What are unemployed loans?

Employment and a stream of regular income are two of the many criteria on which lenders base their lending decision. So if you’re unemployed, your options might be limited since some lenders might have a minimum requirement for monthly income.

Although, many lenders cater to low credit score borrowers who are unemployed and claiming benefits. As long as you can assure the lender of your repayment capability throughout the loan term, they may approve your loan. For benefits claimants, this income is usually the funds from the monthly benefits payment. You also need to ensure that you keep receiving these benefits payments throughout the loan’s term.

The eligibility criteria for unemployed loans can vary from one lender to another. Before applying, however, you should run a quick self-assessment to see if you fulfil these parameters. Here’s what lenders check your profile for:

Age: You must be 18 years or above to be eligible for an unemployed loan.

Residential Status: You must be a legal resident of the UK with an active UK bank account.

Credit History: Lenders might overlook your employment status if you have a solid credit history to back your application. A low credit rating may hamper your chances of securing a loan. Even if a lender approves your loan, the loan terms may not be favourable.

Income: Even when unemployed, you need a source of income to ensure that you can afford the loan. The funds generated from benefits or investment payouts can be used to repay the loan. Ensure you mention the same in your loan application.

Guarantor Requirements: If you are unemployed and on benefits, the lender may consider your application if you get a guarantor to co-sign the loan. Your guarantor will need to have a decent credit history and a regular income.

Where can I borrow quick loans for unemployed people in the UK?

Credit Unions: A Credit union is an FCA regulated financial institution that functions as a cooperative to lend money to its members at significantly low-interest rates. Credit Union members pool in a part of their savings and lend it to members in need. The interest rates for credit union loans are as low as 3%, with no hidden fees or penalties on early repayment. However, to secure money from a credit union, you must be a member, with some savings pooled in with that union.

Universal Credit: Universal credit help those out of jobs or low on income with their living expenses. Your universal credit eligibility will depend on your monthly earnings. Your circumstances are checked every month, so any financial improvements will affect the amount of money you receive. You can use the official benefits calculator to see how much you are eligible for.

Secured Loans: Secured loans are a form of credit wherein you must produce an asset as collateral to secure the loan. Should you fail to oblige to the loan’s terms, the lender may repossess and sell your asset to recover their loss. Secured loans have a lower risk proposition for the lender, which is why they are available at lower interest rates. So you may get this loan even with no income if you have an asset (such as your home) to declare as collateral. But it would be best if you made timely repayments, or else you may be at the risk of losing your home.

Where can I find finance brokers for personal loans in the UK?

  • High-street banks
  • Building societies
  • Credit unions
  • Online lenders
  • Online loan comparison platforms such as Loan Broker
  • Dedicated lenders
  • Government grants or schemes


A no guarantor loan is a convenient option for low credit score borrowers without a guarantor. You will need to improve your credit score to avail of better terms and interest rates on loan offers. Shop around for offers before concluding your search and ensure that you compare the APRs. Try and steer clear of loan sharks, who still operate in the UK despite the FCA’s strict measures.

Loan Broker can be your helping hand when you find yourself stuck in a financial crisis. Visit us to compare multiple offers to find a loan that suits your needs.


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Representative APR Example

The rate you are offered will depend on your individual circumstances.

All loans are subject to status. The interest rate offered will vary depending on our assessment of your financial circumstances and your chosen loan amount.

Representative APR Example: On an assumed loan amount of £2,600.00 over 36 months. Rate of interest 41% per annum (fixed). Representative 49.7% APR. Total amount payable £4,557.89 of which £1,957.89 is interest. 35 monthly repayments of £126.61 and a final payment of £126.54


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