Loans with No Credit Check
No credit checks loans can be the ideal solution for people with a poor credit history, particularly if the missed payments or arrears have been in the recent past.
If you have missed even a couple of payments on a personal loan, credit card or other form of credit in the past, this can adversely affect your chances of getting a loan from traditional lenders such as high street banks and building societies. However, if you are looking for no credit checks loans UK lenders can now approve lending applications without delving into your credit history.
What is a credit check?
When you apply for credit, whether that’s a loan or credit card, car finance, store credit or some other form of lending, the lender usually conducts a credit search with one or more external ‘credit reference agencies’. The three main credit agencies in the UK are Equifax, Experian and Callcredit.
Credit reference agencies store information about credit you have applied for in the past, how much you owe and to whom and, crucially, your payment records for each of your commitments — specifically recording any missed payments, arrears or defaults. The credit reference agencies don’t tell lenders whether to approve or decline a loan, they only provide factual information, which the lender uses alongside their own credit scoring system to determine whether to let you borrow money.
No credit checks loans finance
Some lenders, however, recognise the benefits in judging credit applications on their own merit and the customer’s current circumstances, without relying on an external credit check. For example, a couple of missed credit card payments during a spell of unemployment four years ago may not necessarily reflect a person’s current ability to repay a loan.
No credit checks loans for unemployed and those with a poor credit history offer an alternative borrowing solution to the traditional bank or building society loan. The lending can take any number of forms, from short-term ‘payday’ cash loans to longer term unsecured loans.
Such loans usually use quite a simple application procedure, collecting your personal, employment and salary details, and using this information to make an immediate underwriting decision means no credit checks loans fast turnaround times. Often, the application will be approved and the funds released on the same day.
Understanding the costs
No credit checks loans do usually charge a higher rate of interest than more traditional high street lending — you can compare rates by noting the ‘APR’ or Annual Percentage Rate that is quoted. Although rates can sometimes seem disproportionately high compared to normal bank loans (especially for shorter-term payday loans) it is important to remember that the higher cost reflects both the higher risk to the lender, and the convenience and speed with which the application is normally processed and the money made available to the customer.
Some lenders may ask for a guarantor — often a family member — for the loan. Fees or charges may also apply, so it is important to research the market thoroughly, or use a reputable loan broker or financial adviser who can give you impartial advice on the no credit checks loans options that best suit your needs.
