No Credit Check Loans
If you have poor credit you will know just how difficult it is to be approved. You apply for a loan and all seems well until you get to the part where the credit check takes place. The next thing you know your application is declined, it is the end of the road. So is it possible to get no credit check loans and if so how?
Understanding Loans for Bad Credit
One thing to bear in mind if looking for loans with bad credit is that you are not going to be offered the best rates of interest. However, with our help you will get the competitive rates based on your circumstances.
Lenders may be prepared to offer you a loan but because of your poor credit history, the bigger the risk you might be, so the bigger the rate of interest. On saying this, we work with lenders who offer some of the most competitive rates of interest based on individual circumstances.
In short, the lower your credit score the more you will struggle to find approval for a loan, so the higher the rate of interest. This is something that you do have to live with until your credit score is improved. With this in mind, only borrow what you really need and take the loan out over the shortest period possible to keep the interest down.
Understanding What Affects Your Credit Rating
It might be helpful to know what determines a credit rating to be good or bad and what affects the rating.
Credit ratings are not particularly transparent. This is because people do not get just one single credit score or report. In the UK, there are three separate credit reference agencies.
The credit reference agencies keep data about you and they take into account the following:
- Any applications for credit you have made in the past;
- Any accounts you have, including mobile phone contracts or catalogue accounts;
- Your financial behaviour, such as any late or missed repayments;
- CCJs against you;
- Whether you are listed on the electoral roll;
- Accounts you have opened in the past;
- How much credit you have;
- How much of the credit you use.
All of this information goes towards giving you a credit score.
When you apply for a loan, the lender will do either a full credit check on you or a soft check. A thorough check means they will see more of the above information and the soft check, less of the information.
Things that Are Bad For Your Credit Rating
Some behaviour on your credit report may lead to a poor credit score and it is like waving a red flag in front of lenders. Things that affect your credit rating negatively include:
- Setting up too many accounts, this includes bank accounts or store card accounts;
- Applying for credit by way of loans or credit cards too often. Even applications for credit, whether approved or not, can have a negative impact;
- Spending up to your credit limit affects your score negatively. Just because you have a limit of £2000 does not mean you should spend £1999;
- Missing or being late with repayments of the loan. This leads to you getting default on your credit rating.
Don’t Let Your Past Affect Your Future
Bear in mind that in the UK all lenders are required to perform a credit check, whether this is a full credit check or a soft credit check. The difference with loans without a credit check is that the lender does not put emphasis on your credit history and often only makes a soft credit check.
Anyone with a less than perfect credit score can be turned down for a loan. Many lenders assume that because you had money problems in the past, the same is going to apply now. Of course, this may not be true. You may have overcome any issues you once had in regards to finances and know that you can repay a loan without any doubt.
Lenders still need a great deal of persuasion. Most lenders will focus on your past and this affects your future. If you get lucky, you might come across a lender willing to forget about your past and instead concentrate more on your ability to pay off the loan now. Thankfully, we work with lenders who have this mindset.
Many of the lenders we work alongside believe that what was in the past remains in the past. Providing you can prove that you:
- Are over 18 years of age;
- A resident of the UK;
- Have a job with a reliable income;
- A bank account and direct debit function.
You can apply for a loan without a comprehensive credit check.
Approval or Denial Is Down to the Lender
When applying for a loan and a credit check is undertaken, the lender will access the information on your credit file. It is down to the lender if they want to take a risk by approving you for a loan.
Lenders we work alongside will take into account any information about your job and the amount of money coming in and going out each month. This may be more imperative, as this is precisely what is happening now, not the fact that six years ago you missed a few repayments on a loan before paying that loan up.
Find Out Why You Are Refused Credit
If you do apply for a loan and you are refused you should ask the lender why they declined your credit application, as only they know that reason. It may be useful to understand what criteria caused the refusal. It may be useful to check your own credit score and you can do this free of charge at Experian.co.uk.
The Short-Term Loan Might Be A Viable Option
In the UK, there are such things as short-term loans. These may be a viable option for anyone who needs to get his or her hands on money fast, without having to face a full credit check.
The short-term loan is precisely what its name suggests. The loan is taken out over a short period. In general, a short-term loan is offered for sums from £75 up to $1000 and is paid back within a month. Some lenders do extend short loans for up to one year so it pays to compare. However, as with any loan, the longer you take it out over, the more you will pay in interest.
The Main Benefits to a Short-Term Loan
There are many benefits to applying for a short-term loan and these include:
- A decision is made within minutes;
- It does not affect your credit file if a soft check is made;
- The application is easy;
- If approved money can be in the bank in a day or two;
- Typical loans are £75 to £1,000.
The short-term loan for bad credit may be suitable for such as emergency repairs, having to purchase new white goods or paying a bill that has cropped up and you have found yourself short on cash.
Personal Loans without a Credit Check
If you find yourself needing a larger sum of cash, you might have to consider applying for a personal loan without a credit check.
Typical personal loans offer between £1,000 and £25,000, which are repaid over a longer period. This is generally up to 5 years but is dependent on the loan provider. Again, the rate of interest will vary between providers, so it does pay to compare lenders through us.
Here at Bonsai Finance, we work with lenders offering competitive rates on personal loans specifically for those with a poor credit history.
Secured or Unsecured Personal Loans
Personal loans fall under secured or unsecured loans. There is a big difference to each of these loans, for instance:
- A secured loan requires you to secure something against the loan, such as your home, in the event you fail to repay the loan, you may lose your home;
- The unsecured loan as the name suggests does not come with this risk;
- The secured loan generally allows you to borrow more money than the unsecured and repay back over a longer period of time;
- The interest rate on the secured loan is usually lower than that of the unsecured loan;
- Both generally come with a lower rate of interest than the short-term loan.
A Loan with a Guarantor
Another type of loan that many people with poor credit apply for and get is the guarantor loan.
This type of loan requires you to get someone close to you to sign up for the loan with you and agree to repay the loan if you fail to be do.
Factors to Take Into Account When Considering No Credit Check Loans
All loans will come with terms and conditions. The provider of the loan company sets these out. It is important that you check any terms and conditions before signing for the loan.
One of the most important factors to consider in terms and conditions is whether there are fees. The lender may charge fees on top of the loan and these could be in the form of early repayment charges or arrangement fees.
Early Repayment Fees
If early repayment charges are applicable, it means that if you find yourself able to repay the loan earlier than the agreed date you may have to pay a fee. Some lenders add this into the terms and conditions, as they will receive less interest from you if you repay early. If you believe there is a chance you might be able to save interest by repaying early, it is essential that there is not an early repayment fee.
For instance, you might have taken the loan out over three years and have a windfall and find you can pay off the loan after just two years. If there were a repayment fee in place, you would pay off the loan plus the additional early repayment fee. With this in mind always work out how long you need to take a loan over, choosing the least amount of time to save interest. On saying this, ensure that the repayments are viable. The less time the loan is taken out over, the more costly the monthly repayments.
Loan Arrangement Fee
An arrangement fee may be included in the loan simply because the loan has been organised for you. This is something that has to be weighed up against borrowing or not if the only loan you can get is one that comes with a fee.
While there is never any guarantee that lenders will approve a loan if you have bad credit, some are more likely to than others are. As applying for any loan, whether approved or not, can affect your credit rating negatively, it pays to compare loans with lenders who may be more willing to say yes.
Bonsai Finance understands how the financial sector works, particularly when it comes to people who have a less than perfect credit rating.
We work with some of the most ethical lenders offering numerous loan options, including loans without credit check for those with a poor credit rating. We can match you up with lenders who are perhaps more inclined to offer loans to people in the same circumstances as you.
All the lenders we work with offer rates of interest that is competitive and offer affordable personal loans. The online application is simple and within minutes, you could know if you qualify for a loan. Why not request no credit check loans through us and we can help you to get back into the lending market.