Having a bad credit score can become a huge issue if you find you need to borrow money. You might have held an account with your bank for many years but when it comes to borrowing money from them, many high street lenders will not offer people with bad credit a loan. There is another means of applying for a loan and it is far easier and quicker than making an appointment at the bank. You can submit an application for a loan online and know within minutes if you have been approved. If you are looking for bad credit loans no guarantor no credit check, read on to find out more.
Options for Bad Credit Loans No Guarantor No Credit Check
First, we want to talk about credit checks as no lender in the UK is going to offer anyone a loan without first checking their credit file.
This is the bad news, but the good news is that with the lenders we work with also take your current circumstances into account. This means they will work out whether the loan is affordable. This means they will make a soft credit check but even if you have a poor credit rating, you still might be eligible for a loan if the lender believes it is affordable.
Guarantor loans are usually easier to find approval for if you have bad credit than any other type of loan. However, these types of loans do not suit everyone. You might not feel comfortable talking about your poor credit history or you might not have anyone that would be prepared to stand as your guarantor. There are various options for loans that do not require a guarantor and you can still apply even if you have a less than perfect credit rating. The loans include:
- Personal unsecured loan;
- Short-term loan;
- Payday loan.
So which of the above loans might be more suited to your circumstances and which loan is easier to find approval for if you have a poor credit rating?
Generally, the less you want to borrow and the quicker you can repay the loan the higher the chances are that you will be approved for a loan if you have a poor credit rating. Going on this theory, the payday loan should be the easiest type of loan to find approval for, followed by the short-term loan and then the personal unsecured loan.
What Is A Payday Loan?
A payday loan enables you to borrow just a small amount of money, generally somewhere in the region of £100 to £500.
Payday loans are an excellent entry point loan due to the amount borrowed being relatively small. While you might think £250 is a lot of money at your time of need, lenders see it as a small sum so it is not too big a risk, and more so when you take into account that the loan will be repaid within one to three months.
The payday loan is a suitable type of loan for getting hold of small sums of money if something unexpected crops up and you do not have enough cash until payday.
You might need to get hold of a small sum to pay for repairs to a car, it’s MOT, replace a worn or punctured tire. You might come across a financial outlay that you had not expected or forgot about, such as a bill that needs paying before your next payday. You might even have gone into an unauthorised overdraft on your bank account and the fees are crippling. In some instances, overdraft fees are seven times higher than paying back a payday loan.
In any of the above cases, you could apply for a payday loan and if approved have funds from the loan paid into your bank account on the same day. The money can then be used to pay off whatever outlay is causing you to worry.
When applying for a payday loan you tell the lender when you can repay the loan, this is on your payday. You can pay the whole loan off in one lump sum, including interest, or spread out the cost over three paydays.
What Is A Short-term Loan?
A short term loan, as the name suggests, helps you borrow a sum of money over the short term. This is usually for up to one year but it would depend on the lender and the amount borrowed.
With a short term loan, you can generally borrow between £500 and £1,000. Again, this would all be dependent on the lender with some perhaps offering more.
A short term loan allows you to borrow more than the payday loan but not as much as you might be in a position to borrow if you apply for a personal unsecured loan. With this loan, you have to check the APR as this determines the interest added onto the loan. The APR is the annual percentage rate, the amount of interest you will pay over the year and it can differ between lenders and the amount of money you want to borrow.
What Is A Personal Loan?
A personal loan allows you to borrow anything up to £5,000 and so it is generally one of the most difficult to be approved for if your credit rating is bad. Whether you are approved for a personal loan, would depend on the lender, your credit score and how much you want to borrow.
The interest on the payday loan will be fixed or variable and fixed is better as you then know exactly how much the monthly repayments of the loan are going to be each month.
The agreed monthly repayment is taken from your bank account each month over the term of the loan. This amount includes interest and any added fees.
Eligibility for Loans
To apply for any loan you have to meet the following criteria:
- Have a regular income (benefits or paid work);
- Be 18 years or over;
- You are a resident of the UK;
- Have a bank account and debit card;
- Direct debits can be obtained from the bank account.
If you meet the above criteria, you can apply for bad credit loans no guarantor no credit check with our help. Just tell us the amount of money you need to borrow, the term of the loan and other personal information and we can try to match you up with a lender. We work with a panel of lenders so you have access to a range of different lenders from a single application.