People with a bad credit rating who are looking for a loan often worry that due to their credit score they will be turned down for a loan. While there is no guarantee that you will be given a loan if your credit rating is poor, it does not mean it is impossible to find one. However, looking for bad credit loans no guarantor no credit check is going to be difficult, as all lenders in the UK will take a look at your credit history. Even so, it may be possible to find a loan with no guarantor needed and we can help you.
We are going to provide you with all the information you need to understand loans for bad credit including:
- Credit checks and why lenders make them;
- The types of loans that don’t need a guarantor;
- Eligibility for a loan in the UK and applying.
Why Do Lenders Check Credit Ratings?
So, first things first, why do lenders check the credit ratings of people? It’s not that lenders are being nosy and this is why they check your credit rating. It is more about the risk they are taking by lending money to people whose credit scores are less than perfect.
If you have defaulted on loans in the past, the risk of you doing so again is seen to be high by lenders. There are two types of credit checks, a soft credit check and hard credit check. If you apply to borrow a large sum of money, the lender will look into your credit rating more deeply than they would if you are asking to borrow a small sum.
Types of Bad Credit Loans No Guarantor No Credit Check
A guarantor loan requires someone to stand by your side and it helps to boost your chances of approval if your credit rating is poor. However, these types of loans are not for everyone. There are loans that do not require a guarantor that you might want to consider, with some being easier to get approval for than others.
- Payday loans;
- Short-term loans;
- Secured loans;
- Personal loans.
Loans Offering Small Sums of Money
Payday and short-term loans are two types of loans that do not require you to get someone to stand as your guarantor. If you only need to borrow a small sum of money and have the ability to be able to repay it back quickly, they might be suitable choices for people with poor credit ratings.
Payday loans are the most popular type of bad credit loans no guarantor no credit check if you need to borrow between £100 and £500. This type of loan is most commonly applied for by people who need to get hold of money fast to meet an unexpected financial emergency.
Some of the most common reasons why people apply for payday loans are to cover bills that have cropped up due to car repairs, home appliance repairs or replacements or to get out of unauthorised overdrafts. In fact, a loan can be applied for, for just about any reason.
With a payday loan, the application is fast and you get an instant decision. You can elect to repay the loan and the interest on your next payday or spread it out for up to three paydays. The loan is going to cost more in total if you spread it out longer, as interest is added daily.
If you need to borrow a larger sum of money, between £500 and £1,000 you might consider a short-term loan. You can choose to spread out the cost of borrowing with a short-term loan for up to 12 months. Again, the longer you take the loan over the more interest will be added onto the loan.
Secured and Personal Loans
Both the secured and personal loans allow you to borrow larger sums of money, usually up to £15,000, with repayments spread out for up to 36 months.
As you are asking to borrow a larger sum and spread the loan out for longer, the lender is going to take a closer look at your credit file than they would with a payday or short-term loan.
If your credit rating is very bad, the lender might suggest a secured loan. This means you put something of value up against money you want to borrow. Of course, the risk is that if you are not able to repay the loan, you stand to lose whatever you secured against the loan.
A personal loan allows you to borrow over a longer period and spread the cost out without having to put anything up as security, but it is usually more difficult to find approval for than any other type of loan, if you have a poor credit score.
Loan Eligibility and Application
Regardless of your credit rating, some eligibility criteria have to be fulfilled before you can make an application for a loan in the UK.
To be able to apply for any type of loan you need to ensure you meet the following criteria:
- Have a regular income;
- You are over 18 years old;
- You live in the UK;
- You have a bank account in the UK;
- You have a debit card attached to your bank account.
Providing you meet the above criteria, you can apply for a loan with our help. We can help to match you up with a lender from a panel of UK lenders, all of whom offer some of the most competitive rates on loans.
You can apply for bad credit loans no guarantor no credit check with us and get an instant decision. Lenders we work alongside will consider your current circumstances along with your credit rating and loan affordability.