If you find yourself in need of money fast, there are countless companies that offer quick, often same-day loan without the inconvenience of a credit check. This has virtually become industry standard for payday and other sort term loans, and yet it isn’t as simple as the adverts would make you believe.
What Are No Credit Check Loans?
In the UK, many loans are offered with “no credit checks” and “instant decision” in order to encourage people to apply. Unfortunately, the promise of no credit check loans is a lie; it is actually illegal for a creditor to offer a loan without performing a credit check. This is to protect the applicant from getting into debt that they could not possibly recover from, which, in turn, protects the financial interests of the loan companies, as they are more likely to get their money back.
What Do Companies Mean When They Say “No Credit Checks”?
“No credit checks” actually refer to the pre-application or screening questions that a lot of companies offer now. These pre-application checks are called “soft searches”, and do not delve into your credit history like a credit check does, so being refused for a loan does not end up as a big fat mark on your credit history for other lenders to see the next time you apply for credit. They take into account your current financial situation and show you which loans you’re likely to be approved for. However, passing a soft search simply means that you are more likely to be offered a loan if you apply. It is not a guarantee that you will be approved once a full credit search is completed, and the APR in the final offer may be higher than the one you were quoted after the soft search.
Is There Any Way To Get A Loan Without A Credit Check Being Performed?
There are very few circumstances where a person is able to get a loan without a full credit check being done, though it is possible. One option is pawning an item. As the object that you pawn is being held by the lender a collateral in case of non-payment, no credit check is needed. Alternatively, some guarantor loans only require the guarantor to have a full credit check run, not the applicant. Generally speaking, though, credit checks are an essential part of borrowing money, and protect you from the lender as much as they protect the lender from you.
Should I Apply For No Credit Check Loans No Guarantors?
As mentioned above, there is no such thing as no credit check loans, particularly without a guarantor. However, that doesn’t mean that all is lost!
If you find yourself in need of money, looking into your finance options with a soft search is the best way to start your loan application process. As a soft search is a safe and easy way to see if you qualify for a loan, without the worry that a failed application will send an already bad credit score even further down the financial rabbit hole. As long as you’re honest on your pre-application questions, it is likely that you will be able to find a company that is able to help you.
How Can Bonsai Finance Help?
At Bonsai Finance, we have spent years cultivating an outstanding relationship with a wide variety of lenders, so that we can work with them on your behalf to find the most suitable loan for you. If you’re looking for no credit check loans no guarantors, we will work to help you find the best rates on the market.
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