In a perfect world, lenders would offer no credit check loans instant decision but in reality, the truth is very different. While all ethical lenders in the UK will perform a credit check, it is possible to get an instant decision on a loan.
Why Lenders Need To Make a Credit Check
Lenders need to make a credit check to safeguard themselves and more so if you want to borrow a large sum of money. If you are only asking for a small sum they will still look into your credit history but they will not scrutinise it. Along with this, if you allow us to help match you with a lender from the wide panel we work alongside, the lender will also take your current circumstances into consideration.
Your credit file is what tells the lender how big a risk you are and is what determines your credit rating. This is because it holds all your past credit history. It has information including:
- The amount of credit you owe;
- How many creditors you owe;
- Whether you were late with repayments;
- Missed any repayments;
- Have CCJs against you;
- The percentage of your credit you have used.
From this, the lender will determine how big a risk you might be in regards to repaying the amount of money you are borrowing.
There are different types of credit checks, a soft credit check and hard one. The type the lender makes is going to depend on how much you ask to borrow.
No Credit Check Loans Instant Decision
The loans that require the least amount of scrutiny include the payday loan and short-term loan.
The lenders that we work alongside will not pay too much interest in your credit file if you just ask to borrow a small sum and you can repay it back quickly. In this case, your current circumstances are also taken into account.
Some lenders will consider the fact that your circumstances might have changed from the time you earned yourself a poor credit rating and you might now be in a position to be able to repay a small loan.
A payday loan or short-term loan can be a way of proving your circumstances have changed and may even help to rebuild your credit rating and file.
If you borrow a small sum and repay it on time and in full as agreed, this will be noted on your credit file and shows the lender you are responsible. This might lead to improving your credit stance and future borrowing.
Eligibility Requirements for All Loans
With all loans, there are eligibility requirements. These are requirements you have to meet before applying for the loan regardless of whether you have a good or bad credit rating. If you do not meet the requirements lenders will be unable to offer any type of loan.
This criterion includes:
- Having a regular income either from paid work or some types of benefits;
- Being at least 18 years of age;
- Having a UK address;
- You must provide bank details including your debit card number;
- The bank account needs to accept direct debits for repaying the loan.
Benefits of a Payday Loan
A payday loan is usually one of the no credit check loans instant decision that is easier to find approval for even with a poor credit rating, and it is a loan that is quick to apply for and is paid out fast if approved.
Payday loans did get a bad name in the past due to unethical lenders adding on huge fees and interest when loans were rolled over continually. Providing you stick with ethical lenders, such as the ones we work with, you might be able to borrow between £100 and £500 with a payday loan.
The payday loan is somewhat flexible. Lenders will ask about your paydays when you apply. They will allow you to spread out the repayment of the loan for up to three paydays.
If you take a loan over three paydays the lender will want your paydays and when that day comes around, they will take back a portion of the loan including interest calculated up to that time. Interest is added on daily so to keep the cost of borrowing down you should take the loan out for the least time possible.
The loan has to be affordable and the lender will make an affordability check to ensure that you are not going to be left short of money when payday comes around. This is also something you should consider yourself before applying. Payday loans should not be relied upon month-to-month; they should be considered more of an emergency loan.
Payday loans are a good choice of loan if an unexpected financial outlay crops up and money is tight.
Pay Off Unexpected Bills
Loans such as these are often applied to cover unexpected bills that have dropped through the letterbox which need paying before your next payday.
Pay for Repairs
Your vehicle might break down or perhaps a household appliance such as a fridge or cooker. If payday is some time away, you might borrow a small sum to pay for the repairs.
Emergency Home Repairs
You might have a water leak and need to call out a plumber. You cannot wait for payday with water spurting out of a leaky pipe so a payday loan could provide you with the money needed to call the plumber and get that leak fixed.
You might have been out shopping only to realise when you check the bank account that you have overspent. Bank fees for unauthorised overdrafts can be costly if paid daily; in some cases a great deal more than the interest you might pay on a payday loan.
Is A Short-term Loan More Suitable?
It might be that you need to borrow more than £500 and need to spread the loan repayments over longer than three months. In this case, a payday loan is not a good choice. There is another short commitment loan. Yes, you guessed it, the short-term loan.
A short-term loan generally allows you to borrow up to £1,000 with the monthly repayments being spread out for up to 12 months.
Lower Monthly Repayments vs More Interest
Before applying for a short-term loan, you need to consider how much you can afford to repay each month. This will give you some idea as to how much you might be able to borrow to keep within your budget. It will also give you an idea as to how long to spread the loan over. This is important, as while the longer you spread the loan over the lower the repayments will be each month, the more interest you will pay, so the more the loan costs in total.
Interest is usually based on the APR of the loan; this is the annual percentage rate. Generally, the lower the APR the cheaper the total cost of borrowing.
One thing that determines the APR is your credit rating. The lower your credit rating the bigger the risk the lender is taking and so the higher the interest rate. On a more positive note, we do work alongside lenders who offer some of the most affordable rates of interest, with your credit rating in mind.
What about a Guarantor Loan?
Finally, there is a guarantor loan to consider. This loan needs some careful thought but it might be one way of obtaining a loan up to £5,000 if you cannot find approval for a personal loan.
There is a downside to the loan in that you cannot apply for this type of loan on your own.
As the name suggests you do need a guarantor to stand by your side. The guarantor has to be someone who knows you and who is willing to take on the responsibility of the loan if you find you cannot make the repayments. Therefore, you are asking a lot from that person.
Guarantor loans usually come with high rates of interest and the lender makes credit checks. The person who is standing guarantor should have a good credit rating.
Easy Steps to Apply For Your Loan
In just simple steps, you can make an application for a loan and we can try to match you up with a lender from a wide panel of lenders from the UK.
You benefit from getting an instant decision after providing us with a few details, such as the amount you want to borrow and how long you want to take the loan over.
We search with our lenders and if approved you can go ahead and sign up for your loan online. In many cases, money is paid into your bank account the very same day. While we cannot guarantee access to no credit check loans instant decision is given.