If you have a poor credit rating and are looking to apply for a loan, you might be wondering if there is such a thing as no credit check loans in the UK. This term is spread around the internet often. Make a search and you will be bombarded with headlines that claim you can get a loan without a credit check in the UK. This is wishful thinking, as it is definitely not true. While you may be able to obtain a loan if you have a poor credit rating, there is no such thing as a loan available specifically without a credit check in the UK.
Don’t Waste Your Time Looking for a Loan without a Credit Check
You should not waste your time looking for a loan without a credit check, as they simply do not exist. As mentioned above, if you search using a search engine for a loan of this nature, you will find companies listed on the search with headlines that are meant to catch the eye of those with poor credit who are looking for loans. Headlines might say, “long term loans no credit check” or “small loans in the UK bad credit no credit check”.
However, if you visit the lender and go through the tedious process of applying for the loan you will find that, surprise surprise, lenders do in fact make a credit check.
No ethical lender will give you money in a loan without first assessing whether or not you have the ability to be able to repay the loan. So why do they say they can? Well the truth is that the headlines did what they were designed to do, catch your eye and lull you into false pretences that the company will give you a loan without making a credit check. This is one way of getting you to visit their site. Now you might be offered a loan with them, after having a credit check, or be turned down, which leaves you having to start searching again from scratch.
There is an easier way to seek a loan if you have bad credit and that is with our help. With a simple application, we can search with our panel of lenders to try to match you up with a lender who will offer you a loan. We will not lie to you to get you to our site. Lenders will check your credit file but they also take your ability to repay into account when deciding whether to offer you a loan.
By Law All UK Lenders Have To Check Your Credit File
All lenders in the UK have to check your credit file by law before they offer you a loan. If any lender does offer you a guaranteed loan without a credit check you should be wary, as they may not be above board and it could cost you dearly in high interest rates and fees.
The financial Conduct Authority regulates payday loans along with other forms of credit and by law lenders have to undertake a credit check to ensure that people applying for loans can afford them. Despite this, many lenders still advertise that they offer loans without a credit check and people are deceived.
What Would Be The Benefit of Loans Without A Credit Check?
People who have a poor or bad credit rating who want to borrow money would be able to benefit from a loan that is offered without a credit check, as the lender would not see their poor borrowing past. However, as we have said above, there is no such loan out there.
You might not benefit from a no credit check even if there was such a product out there. More so if your circumstances have not changed and you know you might have difficulty repaying the loan. In this instance, while you might be granted the loan, you might default on it again and end up in even more debt with another bad mark against your credit rating. So, if the lender gave you a loan that way it would not really help your situation. Thankfully, even with a credit check people with bad credit can still get loans. There is no reason for lenders to lie about credit checks for loans and no reason for people to go on a fruitless search for one.
- All UK lenders have to check your credit rating;
- There is no such thing as a loan without a credit check;
- There are loans that people with bad credit may be accepted for even with a credit check.
What Happens When Lenders Perform A Credit Check?
Some lenders undertake what is called a soft credit search. This means that they do not look too deeply into your past credit history. This is good for anyone who has a poor credit rating.
When lenders only make a soft credit search instead of a full one, they will not dig too deep into the report. Usually with this type of search the lender will be more interested in knowing whether you are who you say you are than if you have missed a couple of repayments some years ago. Checks such as this do not usually leave a footprint on your credit file so will not affect your credit rating in any way.
If you are applying for a large loan the lender will usually undertake a full credit check and look deeply to find out if you have CCJs against you, among other things. However, this is not to say that you will not be offered a loan; it really is down to the lender whether they offer you a loan once they have considered your credit file.
What Are The Options If You Cannot Get No Credit Check Loans in the UK?
If you have a poor credit rating and want to borrow money, you might still be able to get a loan even if the lender checks your credit rating. We can help you get a loan as we match you up with our panel of lenders. Our lenders will look at your credit file, but they also consider your circumstances right now.
So what are the choices of loans if you have bad credit?
- A payday loan;
- A short-term loan;
- A guarantor loan;
- A personal loan
Is A Payday Loan Suitable For You?
A payday loan is one option to consider if you have a bad credit rating. These loans should be considered only if you need a small amount of money and are in a position to repay it back over one to three months.
As the loan is taken out only over the short-term the interest rate is not calculated annually, it is calculated daily instead. This type of loan is generally considered the more costly way of borrowing, but it may be one way of getting your hands on money fast. On saying this, this type of loan can work in the way it is meant to work, a low sum of money paid back quickly, providing you repay it as planned.
Payday loans are the quickest type of loan to be approved for as you are borrowing a relatively small sum of money in the grand scheme of things and repaying it back quickly. With payday loans, you can generally borrow from £100 up to £500 but some lenders will allow you to take up to £1,000.
The lender will consider your credit rating; there is no way around that. However, as mentioned above we work with a range of lenders who consider your current circumstances as well before making a decision.
Payday loans can be applied for by anyone who has an income coming into the house on a regular basis. This means an income through work or benefits that is paid into the bank. The lender will consider your income and outgoings and if they think you can afford the loan, they will approve it.
Is a Short-term Loan Suitable For You?
A short-term loan might be suitable if you want to borrow a sum of money that is more than what the payday loan offers. It will also allow you to spread out the repayments for a while longer than the payday loan does.
You might be able to apply for a short-term loan and spread the repayments over up to 12 months or more. Applying for a short-term loan is quick and easy and usually you will be given a decision in minutes, as the entire loan application is made online.
Short-term loans are a convenient way of borrowing as the application is made online from the comfort of your armchair. We work with numerous lenders who offer loan options for anyone, including those with a poor credit rating. Loans have competitive rates and only a few details are required to start the process off.
Is A Guarantor Loan Suitable For You?
A guarantor loan might be suitable if you want to borrow a larger sum of money and spread the repayments out.
The guarantor loan requires that someone over the age of 18 with a good credit score stands by your side and agrees to take over the repayments of the loan if you find you cannot make them. This is asking a lot from someone so be sure that it is worth asking them and that you are able to make the repayments and your circumstances are not going to change during the term of the loan.
Is A Personal Loan Suitable For You?
If you need a larger loan and want to spread the repayments over several years, it may be difficult to get approval for a personal loan with a poor credit rating. This is a loan with perhaps the least chance of your being approved, but if the lender thinks you have enough disposable income they might approve it.
A personal loan is usually an unsecured loan but there is also a secured loan, which means you have to put something up against the loan, usually your home.
Interest Rates and Other Fees on Loans
The interest rates on any loans will vary from lender to lender and your circumstances. If you have a bad credit rating the APR is usually higher than on a loan for someone whose credit rating is good. This is because the lender is taking a risk on someone with a bad credit rating.
When applying for a loan, if you have the option make sure you compare the interest rate along with other fees. Never rush into taking out a loan until you have checked it is affordable, including any fees and interest added on.
While it may look as though a loan with a lower APR would be the one to go for, it may not work out the cheapest if it has fees and additional costs added on. So compare fees, including whether you would have to pay an early repayment fee if you were to find you could repay the loan early.
While there is no such specific financial product as no credit check loans in the UK, this does not imply that you cannot get a loan if you have bad credit. You might be eligible for a loan even if the lenders check your credit rating as the lenders we work with also consider your current financial circumstances. If you are 18 at least, have a regular income, can afford the loan and have a bank account and debit card you can apply and get an instant decision.