If you are in the market for a loan, you might have come across the term no credit check loans. If you have a poor credit rating, this indicates that the lender will not check your credit rating so you will be accepted for a loan. In fact, this is not the case. All lenders in the UK will check your credit rating whenever you apply for a loan. There is no such thing as a loan without a credit check.
So where does this leave you, you might be asking. Does this mean that if you apply for a loan with a poor credit rating, you will be denied? Not necessarily so. On the same footing it does not mean that you are guaranteed to be approved for one either.
When thinking about applying for loans bear mind:
- You should be old enough. This means at least 18 years of age;
- You do need to have a regular income each month and have enough disposable income to cover the loan repayments.
- You do have reside in the United Kingdom;
- A bank account is required so the funds from the loan can be paid into your account if you are approved;
- You should have a debit card attached to the bank;
- The lender will want to take the repayments for the loan back via direct debit each month.
The above criterion applies to anyone applying for a loan regardless of his or her credit status.
Is A Credit Rating the Only Thing Lenders Consider?
If your credit rating is particularly bad, you might be wondering if the lender only bases their decision about whether to grant you a loan on your credit rating.
Lenders will undertake different depths of credit checks depending on the type of loan you apply for. If you only apply to borrow a small amount of money, they are not likely to be too worried about your credit past. On the other hand, if you apply for a loan of thousands of pounds they may scrutinise your credit file.
However, the good news is that lenders we work alongside will consider your circumstances too. This means they will take into account the fact that your circumstances might have changed and you might now be in a position to borrow and repay without any issues.
With this in mind, they will want to be sure that you are in a position to repay the loan. This is something they will base on how much income you have going in each month and what is paid out in bills and other expenditure. What you have left is disposable and would be the money you would use to repay a loan.
Providing you have enough disposable income, there is no reason why a lender would not give you a small loan.
Types of Loans You Might Consider With a Poor Credit History
So, what types of loans might you be approved for even if you have a poor credit rating?
You might want to consider:
- A guarantor loan;
- Short term loan;
- Payday loan.
Are Guarantor Loans No credit Check Loans?
As mentioned above no loans are considered no credit check loans. Whichever loan you apply for lenders are going to peek into your credit rating. Some loans, small loans, they will not look too deeply at. However, your chances of obtaining a loan even with a poor credit rating do improve if you have a guarantor.
A guarantor loan means that you ask someone to stand as a guarantor. This has to be someone who trusts you and you them, so a good friend or family member. It cannot be a spouse or a partner though.
If for whatever reason you cannot meet the repayments of the loan then the guarantor takes them over. This means there is less risk to the lender so they are more likely to offer a loan to people with poor credit ratings.
With a guarantor loan, you might be in a position to borrow up to £15,000 and spread the repayments for up to 36 months.
If you do not have someone you can ask to stand as guarantor, or you would rather not have a third party involved you can look into other options. Usually these loans do not offer large sums of money.
A Short Term Loan
You might want to take a look at applying for a short-term loan if you need to borrow in the region of £500 to £1,000.
One of the benefits of a short-term loan is that you can borrow a small sum but spread the repayments for up to 12 months. While this can help to make the monthly repayments more affordable, you will pay more interest the longer the term of the loan.
The short-term loan with be offered with a set APR and generally the lower the APR the less the loan is going to cost over the term. However, you also have to factor in any fees attached to the loan when comparing.
Payday Loans May Be Easier to Find Approval
You might be able to find approval easier if you have bad credit and you apply for a payday loan.
Payday loans offer just a small amount of money. This usually starts from as little as £100 and up to £500. One of the biggest differences with a payday loan is the term of the loan. Unlike a guarantor or short-term loan, the payday loan is repaid within one to three months.
You decide how many paydays you want to spread the loan over and the lender takes money from each payday until the loan has been repaid, along with interest. Interest is usually added on a daily basis due to the loan being repaid quickly.
With payday loans, it is not unusual for the loan to have a percentage of 1000% to 2000%APR. This amount would be added onto the loan over the year. However, what is important to keep in mind is that you are repaying the loan within a month or two, so this is not the amount of interest added onto the loan.
While payday loans used to have a bad name as some lenders charged high rates and fees, the FCA now regulates them to keep costs from spiralling.
A payday loan is fast to apply for and you get an instant decision. If your loan is approved it may be possible for you to get the funds paid directly into your bank account within hours.
Payday loans are often taken out when met with a financial outlay that has come about unexpectedly and payday is still some time away. Providing you go into a payday loan knowing without a doubt that you can repay it on time, this type of loan can work to your advantage.
Popular reasons why payday loans are taken out include paying bills that have been forgotten about and which cannot wait for payday. To cover the costs of unexpected repairs that have to be made to your property or household appliances or to get out of an unexpected unauthorised overdraft and huge fees are applicable.
Reasons to Apply Online With Our Help
You could make a search yourself for a loan if you have bad credit, but this can take a great deal of time and you might have to make several applications with different lenders before securing a loan. However, each time you apply for a loan a note of that application is made to your credit file. If you make too many applications, it goes against you and lenders may think you are desperate. Thankfully, there is a much easier solution.
We can help you search for a loan. Not only that, we can help you to find a loan with multiple lenders. You are not required to make separate applications. Just make one single application and allow us to search for your loan with our panel of lenders. You get the benefit of a search with multiple lenders with only one application. This saves time and you do not get multiple searches recorded on your credit file.
We cannot promise you no credit check loans but we can help to match you up for a loan from one of the lenders on our panel. Multiple lenders mean multiple chances of you being accepted for a loan, even if you have a poor credit score. The lenders we work with offer numerous loan options, some of the most competitive rates and affordable loans. Apply with us today and within minutes you get a decision.