Applying for a Loan with No Credit Check

When applying for loans, no credit check options may be preferable for those who have experienced financial difficulties or credit problems in the past.  In these circumstances, it helps to do your homework and be well informed about what your options are and what to expect when you apply for a loan.

What is a credit check?

When you apply for a personal loan with a high street bank or building society, they will automatically perform a check with one or more of the UK’s credit reference agencies.  Your credit record will show them how much you owe, to whom, and record show your payment history including the details of any arrears, defaults or County Court Judgements (CCJs).  Remember that your credit history doesn’t just cover personal loans, but any form of borrowing such as your mortgage, credit cards, store cards, overdraft, and car finance etc.

 If you have a poor credit history, this will come up when the bank performs the credit check, and in many cases could result in your loan application being declined.  You can obtain a copy of your own credit report directly from the three main UK reference agencies — Experian, Equifax and Callcredit.  This lets you see exactly what information banks base their decisions on when considering whether or not to give you a loan.

Loans with no credit check

A number of specialist lenders in the UK offer specifically tailored loans, no credit check required.  This can offer a straightforward and practical solution to people who know that their credit record would go against them when applying for a loan, giving the reassurance that their application will be treated on the same merits as those with a spotless credit history.

Loans with no credit check can take a number of forms, from fairly straightforward unsecured personal loans repaid over a number of years, to short-term ‘payday’ loans that are normally paid back within a calendar month.  Some types of loans may request a guarantor (for example a family member), but many don’t — it’s easy to find exactly what you need online by searching for such terms as ‘loans no credit checks UK’ or ‘loans no credit check no guarantor’.

It’s important to be aware that these types of loans typically charge a higher rate of interest than you might expect from a high street lender, for example.  This is because the lender is taking a bigger risk by accepting applicants without asking for a credit check, and they offset this risk by charging more.

Consider all the costs

As well as higher interest rates, some lenders may charge arrangement fees or apply other charges to take out the loan.  Make sure you consider all your options, looking at the APR (Annual Percentage Rate) and consider whether you need a loan with no fees.

By taking professional advice from a broker or financial adviser, you can be sure of being able to choose from the range of loans no credit check that will best suit your needs.