Anyone with a poor credit rating is going to be apprehensive when applying for a loan. While it is important to realise that there are no such things as loans without credit check or guarantor, it is also just as important to bear in mind that people with poor credit may be considered for loans. There are also certain types of loans more suitable for people with poor credit.
There Are Loans That Don’t Require a Guarantor Suitable for Bad Credit
People with a poor credit history may be able to apply for a loan that does not need a guarantor, but credit checks are always performed in the UK. There are different types of credit checks. With some types of loans, lenders do not put too much emphasis on your credit past; they care more about whether the loan is affordable in the present.
The types of loans that do not usually require a deep look into your credit score include:
- Payday loans;
- Short-term loans.
What Is A Credit Check?
Lenders undertake a credit check when people apply for loans. Usually they will look deep into your credit history if you apply to borrow thousands of pounds spread out over many years. Even if you apply for a small loan, and want to repay it within a month or two, the lender will still need to check that you can afford the loan.
When lenders look into your credit rating, they check for such as:
- The credit accounts you have open;
- Outstanding loans;
- Late or missed payments;
- CCJs (County Court Judgements);
- If you are on the electoral role;
- Your address, full name and date of birth.
Lenders use this information to determine you are who you say you are and whether they think you are likely to repay the loan. Again, with payday and short term loans lenders do not put too much emphasis on your credit past, more on your ability to repay the loan.
You Might Still Get a Loan Even Though There Are No Loans without Credit Check or Guarantor
Even though you there are no loans without credit check or guarantor you might still be able to get a loan that does not require you to get a guarantor.
The payday loan offers people with poor credit ratings a chance to borrow a small sum of money, usually in the region of £100 to £500. The payday loan was initially a loan that was repaid on the borrowers next payday but today it can be spread out over three paydays if required.
Lenders tend not be as interested in your credit rating when you are only borrowing a small sum of money, but they have an obligation to check. They will put more faith into your ability to repay the loan, based on the amount of money you have coming in and what goes out each month.
A short-term loan is another option for loans that do not need a guarantor. But again a credit check will be undertaken. The repayments of the loan can be taken out over a slightly longer period, usually for up to 12 months but some lenders may extend this for longer. It may be possible to borrow between £500 and £5,000.
When considering loans without credit check or guarantor the first thing you have to consider is which loan might be more suited to your circumstances.
As mentioned above payday loans generally offer in the region of £100 to £500. This type of loan can provide a great opportunity to get out of a tight unexpected financial spot, and payday is still some time away. There are many reasons why people apply for payday loans with some of the most common being:
- You forgot that a final demand bill needs paying and your payday is too far away;
- Your car breaks down and needs to be towed to a garage and repaired;
- You need to purchase a new tire for your car after suffering a puncture;
- You have overspent and gone into an unauthorised overdraft and the fees are going to be crippling as payday is some time away;
- An appliance that you cannot manage without has broken down and needs repairing or replacing.
In any of the above situations, a payday loan might be more suited to your needs that a short term loan. This is due to the fact that payday loans are generally quick to apply for and you get an instant decision. Lenders are more lenient when offering payday loans so if your credit rating is poor you might stand a better chance of being approved for this type of loan.
The APR on Payday Loans without Credit Check or Guarantor
You might have been put off from applying for a payday loan due to the bad press they have received. However, bear in mind that providing you know the loan is affordable, it can work as designed. For instance, in the case of going into an unauthorised overdraft the bank fees are high. However, you could borrow the money to cover your overspending and get out of the overdraft, with the repayment of the loan working out cheaper than bank fees.
The same might apply if your vehicle breaks down. In this case, you would have to factor in the additional cost of using public transport while you wait until your next payday to come around to pay for the repairs. Public transport can work out to be very costly, a payday loan might work out cheaper and it would save the stress of managing without your vehicle.
Interest is Charged Daily
Interest on payday loans is charged daily. This means that the many thousands of percentage, typically advertised with a payday loan, is not what you are actually going to pay. While you can spread the payday loan over up to three paydays, you are going to pay out more for the loan in total. Always take a loan over the shortest term possible.
We Can Help to Match You with a Lender
If you are looking for loans, we can help to match you with a lender from a panel of UK lenders. To begin your application for a loan just tell us the amount you want to borrow and the length of time you need to borrow the money over.
This will determine whether a payday or short-term loan might be the most suitable for your needs. We will then ask you to provide us with your details and this will include your bank account and debit card details. Lenders need these to be able to pay you the money if the loan is approved and to take back the monthly repayments from your account. To be eligible to apply for a loan with our help you should:
- Have a regular income paid into your bank account from either work or benefits;
- Be at least 18 years old;
- Live in the United Kingdom;
- Have a bank account in your name with a debit card attached;
- Be able to set up direct debits.
When applying for loans without credit check or guarantor lenders will look into your credit rating, but also factor in your ability to repay the loan.
Ethical lenders will not offer loans without credit check or guarantor but they will offer loans that do not require a guarantor. The lenders we work with offer affordable short term and payday loans between £100 and £5,000 repayable between 1 and 36 months. All lenders will check your credit score and ensure the loan is affordable. Apply with us today, the application is fast and you get an instant decision.