You have a poor credit history and you are wondering if there is such a thing out there as bad credit loans no credit check. Well lenders do not offer a special type of loan for people with poor credit but some types of loans are easier to get approval for than others are. One thing we will say right away is that the lenders we work with will consider your circumstances at the moment alongside your credit past.
Lenders Realise Your Circumstances Change
The panel of lenders we work alongside do realise that things do change. Sure, in the past you might have struggled to repay a loan, perhaps been late with a couple of the repayments or even missed a repayment. Things could now have changed, your circumstances might have changed and you are currently in a better position than you were some years ago.
Lenders will consider your credit rating, but there are different levels of credit checks. Lenders are not going to offer you several thousands of pounds without first having some idea of your background and how big a risk you might be. On the other hand if you only want to borrow a small amount of money and you can repay it within a month or two, they are not so worried about what happened in your past.
Therefore, to answer your question, there are no loans offered without credit checks but the depth of the credit check is going to be determined by how much you want to borrow and how long you are taking the loan over.
The good news is that providing the lender believes you have the ability to be able to repay the loan they will consider your application.
What Loans Are the easiest to be approved for with Bad Credit?
There are never any guarantees when it comes to loans and this applies to people with poor and good credit scores. Someone people might have a good credit score but if the lender does not believe the loan is affordable, the application can be turned down.
On saying this, there are certain types of loans that might be easier to find approval for if you have a bad credit rating.
These include a guarantor loan, payday and short term loan. You might find approval for a personal loan, but it is usually more difficult if your credit rating is poor.
So let us discuss the different types of loans below to find out, which might be a better choice for you to apply for.
Some Loans Offer More Money over a Longer Term
Not all loans are equal. There are loans that offer only a small amount of money and loans where you might be able to get thousands of pounds. Some require that you repay the loan back within a month or two, while other loans give you more freedom as they can be spread out over years.
The most suitable loan for you is going to depend on the following factors:
- The sum of money you want to borrow;
- What you want the money for;
- The length of time you want to spread the repayments over;
- Your ability to repay.
Loans Offering Smaller Sums of Money
People with poor credit ratings are going to find it easier to get approval for loans if they are applying for relatively small amounts of money and can repay the loan back within a month or so.
The payday loan provides an example of a loan that allows people to borrow a small amount, usually between £100 and £500, depending on the lender and ability to repay it. This can come in very handy if you have depleted funds in your bank account and an unexpected bill drops in your lap. You might have forgotten to budget for your cars annual service and it is due. You might have overspent and realised you are now in unauthorised overdraft. If so the bank fee can be crippling. In either of these cases, you could borrow a small amount, pay off the bill and then repay the loan on your next payday.
Depending on how much you choose to borrow with the payday loan you might want to spread the cost over three paydays. This would essentially mean that you are taking the loan out for three months.
When your pay dates come around the lender takes the agreed sum out of your bank via direct debit. Of course, the longer you take a loan the more interest is going to be added onto that loan. Payday loans generally show the APR and this can cause some concern as it is usually in the thousands of percent. This is the amount of interest you would pay over the year for the loan. However, you are not paying it over the year; you are repaying it in full within a couple of months.
Borrowing Over the Short Term
Another loan that is not taken out over many years is the short term loan. Exactly what short-term is would depend on the specific lender but generally, it is a period of no longer than 12-months. This is a popular choice of loan for people looking for bad credit loans no credit check.
Again, the loan can be made more affordable by choosing to spread out the repayments over 12-months, but then more interest is going to accumulate. Therefore, you should expect the total cost of the loan with interest to be a great deal more than if you had you taken out the loan over a shorter term. You are going to have to find a fine line between affordability of the monthly repayments and the amount of interest that will be added on.
Lenders generally offer sums of money between £500 and £1,000 with short term loans. While this type of loan can be applied for, for any reason, it could come in handy if an appliance was beyond repair and you need to purchase a new one and could not wait until payday. As with the payday loan, the application for the loan is undertaken online. This means you know within minutes if you approved and if so you can check out the loan details, sign up and possibly have money paid into your bank account the very same day.
Guarantor Loans for Larger Sums of Money over Longer Terms
You might have the need to borrow a larger sum of money and wish to spread the loan over a longer term. This might be applicable if your car has finally packed in and you need to purchase a good quality used one or you need to make home repairs, say to a leaky roof.
Lenders might allow you to borrow up to £15,000 with a guarantor loan and spread the cost over up to 36 months, even if you have less than a perfect credit rating. They are prepared to take that risk as you have a guarantor that puts their name to the loan alongside you. This ensures that in the event that you find you cannot continue with the monthly repayments, the guarantor takes them over until the loan is paid, or pays off the loan.
This is a big asking of course, so the guarantor needs to be a good friend or a relative. You cannot ask your spouse or partner to stand as a guarantor. Guarantor loans can put a strain on relationships so you do have to think twice before committing yourself and someone else to the terms and conditions of the guarantor loan.
Bad Credit Loans No Credit Check Are Not Possible
All ethical UK lenders have to make a check of your credit file when you apply for a loan. There is no way to get around this. Even if you have a bad credit rating and the lender sees this, it does not automatically mean that they are not going to give you a loan.
Higher APRs for Those with Poor Credit
Usually what it does mean is that the APR will be higher than what they might offer to someone with a good credit rating, as the lender will see you as being a bigger risk. If you have a poor credit rating due to being late with a repayment, this is not going to worry them as much as if you have failed to repay a loan and have a CCJ against you, but you will still be classed as being a risk.
While you cannot expect to be offered the lowest APR on loans for bad credit, the lenders we work alongside do offer some of the best rates around for people with poor credit. We can try to match you up with a lender offering affordable loans and who considers your current circumstances not just your credit file.
Small Loans Are Generally Easier to Get Than Large Ones
Depending how on big a risk the lender sees you will determine whether they will offer you a larger loan over a longer period, a small loan paid back quickly or suggest a guarantor loan.
When looking into your credit file the lender takes notice of many things. Whether they make a soft credit check or look deeper into your credit file is going to depend on how much money you are asking to borrow and how long you wish to spread the loan over.
Things That Affect Your Credit Score
Things that affect your credit rating include:
- Having a financial connection to someone with a bad credit rating;
- How much money you owe to lenders;
- Late payments;
- Missed payments;
- Home repossession;
- Have an IVA;
You should check your own credit rating to find out what lenders see and there are many ways of doing so free of charge, with one being ClearScore.
It is likely that you have earned a bad credit score through no fault of your own. Lenders can make mistakes and not clear loans or credit you have paid off in full for instance. If you find any mistakes on your credit file get in touch with the lender and have them corrected.
Loan Eligibility and Applying For a Loan
Your credit rating is not the only thing that is going to decide whether you are eligible for a loan. There are some criteria set out that anyone applying for a loan regardless of their credit score, has to meet.
First, you need to have a regular income coming in each month and you have be over 18 years of age. You are required to live in the UK and have an address in your name. However, if you live with parents and are over 18 you can still apply for a loan. You will also need a debit card attached to a bank account in your name and that account should be able to accept direct debits.
To apply for a loan simply tell us how much you would like to borrow and how long you want to borrow the money for, using the sliders. Give us your details and we can then search to match you up for a loan with a lender from the panel of lenders we work alongside. Should one lender turn you down we can move to the next.
If we are successful in finding a match, you can review the loan to make sure the terms and conditions are all in order, go ahead, and sign up.
There is no such loans as bad credit loans no credit check but the lenders we work alongside consider your circumstances not just your credit file. They offer affordable loans with competitive rates, along with offering numerous loan options.