The first thing that people with poor credit ratings want to know when considering applying for a loan is whether they have to undergo a credit check. Therefore, we aim to answer the question, is it possible to get bad credit loans no credit check?
If you type that query into a search engine on the first search page that pops up you will find enticing headlines that claim lenders will offer you a loan without a credit check. However, this is not entirely accurate, all ethical lenders in the UK will want to check your credit score.
In this article, we will explain:
- Whether there are loans without credit checks;
- The different credit checks;
- Why lenders check your credit file;
- What types of loans are available;
- Which loans may be more suited for people with poor credit ratings?
- Why apply with our help for a loan.
Are There Bad Credit Loans No Credit Check?
We are not lenders ourselves. We work alongside a panel of ethical lenders offering some of the most affordable rates and loans. The lenders we work alongside consider all circumstances and take affordability into account more than they do your credit past.
However, it would be unethical of them not to give some thought to how you managed credit in the past so they are going to look at your past to some extent.
If you are only asking to borrow a small sum of money, lenders are not going to look too deeply into your credit past. Instead, they will focus more on your ability to be able to repay the loan. Of course, if you ask to borrow many thousands of pounds they are going to want to ensure you can afford the loan and they will look deeper into your credit past to find out how you have managed credit in the past.
So to answer the question of whether there are loans that do not require credit checks our answer would be no. On saying this, some loans do not need a deep look into your credit file and if you have a bad credit rating these types of loans may be more suitable.
Different Types of Credit Checks
There are different types of credit checks and these are:
- Soft credit checks;
- Hard credit checks.
A soft credit check is also called a preliminary check. This type of check may be made if you are only borrowing a small sum of money and the lender is not too interested in your credit past.
A hard credit check is generally made if you are applying to borrow thousands of pounds and want to spread the cost of the loan out over many years.
Why Lenders Check Your Credit File
Lenders will check your credit file, more so when asking to borrow a large sum of money, as they will want to know how big a risk you pose.
For instance, you might ask to borrow £5,000 and spread the cost of the repayments for up to 36 months. This is a lot of money. Lenders will not want to hand money over to someone who has CCJs on their credit file or who have missed repayments or even failed to pay off a loan in the past. Therefore, they will take a deep look into the credit file to determine how likely they are to get their money back.
What Types Of Loans Are Available?
There are many different types of loans on the market but some are easier to find approval for than others might be. Loans include:
- Payday loans;
- Short-term loans;
- Guarantor loans;
- Personal loans.
Which Loan Is More Suited For Someone With Bad Credit?
Out of the options above the first three are perhaps more suitable for people with bad credit. Personal loans are more difficult to find approval for if your credit rating is poor. However, it is not impossible and we do work alongside lenders who will consider all circumstances and consider affordability.
Payday Loans – Small Loans Paid Back Quickly
A small sum of money is usually offered with payday loans, usually in the region of £100 to £500.
Loans such as these are not intended for relying on month-to-month. Instead, they should be considered as one-off loans that are taken out to get the borrower through a period of unexpected financial trouble. This type of loan can work as intended providing you know you can repay the loan as agreed, in one to three paydays.
For instance, to pay for repairs to a vehicle that has broken down, repairs to a household appliance such as a cooker or refrigerator, or to get out of an unauthorised overdraft to avoid high fees.
In cases such as these, a small sum of money could be borrowed to recover from the financial disaster and the money repaid on either the next payday or over three paydays.
When considering payday loans you do have to give some thought to the fact that spreading the repayments over a longer period means the loan might be more affordable. However, in the long term, the loan will cost more as interest is added to the amount you have borrowed daily.
With a payday loan, it is important to pay off the loan in full on time to avoid debts spiralling out of control, which could make it an expensive way of borrowing.
Short-term loans are loans that may offer up to £1,000, which are repaid over a longer-term than a payday loan but generally no longer than 1 year.
Loans such as this can be applied for and used for any personal reason and of course, the longer you take the loan over, the more affordable the monthly repayments. It can be tempting to take a loan out over a longer period but bear in mind that this is going to make the loan more costly in the end.
When considering loans the APR, which is the annual percentage rate, has to be taken into account.
The APR differs with one criterion being your credit rating. Only those with an excellent credit rating get the lowest APRs.
If you allow us to help match you with a lender, you are going to be offered the best rates of interest based on your circumstances.
Guarantor Loans for People with a Poor Credit Rating
If your credit rating is particularly bad, you might want to consider a guarantor loan. Loans of this nature do come with many downsides and you do need to be aware of them before signing up for this type of loan.
For one, both you and the person standing as guarantor need to be aware of what a guarantor loan entails.
In short, when taking out a guarantor loan you need to get someone who is willing to sign up for the loan with you. That person needs to have a good credit rating and in the event, you fail to make the loan repayments, they have to take the debt over.
It is not always easy talking to someone about money, let alone the fact that you cannot get a loan on your own. The person standing as your guarantor has to be a good friend or relative, someone who knows you well and this means putting the burden on them. Even with the best of intentions, no one knows what might be around the corner and it could mean your guarantor is called upon to take over the loan repayments. Therefore, this type of loan has to be given some serious thought before applying.
Personal Loans for Borrowing Up to £5,000
Anyone needing to borrow up to £5,000 and spread out the loan for up to 36 months might consider a personal loan.
While personal loans are not out of reach for people with poor credit histories, they are not the easiest types of loans to be approved for with a poor credit rating. We can help you to find a loan as lenders we work alongside will take into account your current circumstances along with your credit rating.
The APR on personal loans is going to determine how much interest is going to be applied to the loan over the term of borrowing. The longer you take the loan over the more it is going to cost in total.
The Benefits of Finding Loans with Our Help
We understand the world can be a lonely place when you are looking for loans with a bad credit rating. High street lenders will not consider offering you a loan once they know your credit rating is less than perfect.
Applying for loans online provides access to a wider range of lenders, but still, finding a lender willing to consider your current circumstances is still difficult.
Instead of searching for a loan on your own and perhaps being turned down multiple times, all of which affect your credit file, we can help to bridge that gap between affordable loans and you.
There are numerous benefits to allowing us to search for a loan on your behalf.
Save a Great Deal of Time
One benefit is the amount of time saved. It can take a long time, perhaps days, to find a lender willing to offer you the loan you want with your credit rating. We, on the other hand, can search with a panel of lenders within minutes and provide you with an instant decision.
Lenders We Work With Will Consider Your Present Circumstances
We work alongside a panel of UK lenders who consider all circumstances and who take your ability to repay the loan into account alongside your credit rating. Lenders realise that your current circumstances might have changed from when you earned your poor credit rating and you might now be in a position to repay a loan.
The lenders that we work alongside offer a range of loan options with affordable rates.
Criteria for Borrowing in the UK
To be in a position to borrow with our lenders you have to meet the following criteria:
- Be at least 18 years old;
- Have an address in the UK;
- Have a regular income (some benefits are classed as an income);
- Hold a bank account in your name;
- Have a debit card attached to the bank account;
- A direct debit can be set up on the bank account to repay the loan.
It Takes Just A Few Minutes to Apply for a Loan
To begin your loan application we simply need a few details from you. Once we have the information we can start a search with a range of UK lenders. This benefits you as from just one single application you get to access numerous lenders. If you had made the search with the same number of lenders yourself the applications would all have been noted separately on your credit file. Making many applications for credit is not a good thing and goes against you as it looks as though you are desperate.
If we match you up with a lender you can then check out the details of the loan and once you have happy the loan meets your requirements, go ahead and sign up for it.
It is possible to apply for a loan with our help, get approval and have the funds from that loan paid directly into your bank account without hours. This is a great relief if you need a small sum of money to get you out of an unexpected financial mess until next payday.
While it may not be possible to get bad credit loans no credit check required, you still might be approved for a loan with one of our lenders. Apply today and get an instant decision on payday, short-term, personal loans and more.