What are no credit check loans?
A no credit check loan is when an individual applying for a loan is not required to have their credit history checked in order to assess their overall affordability and financial behaviour. No credit check loans may be the fastest and easiest way to access additional finances, however do any lenders offer the option to apply for a loan without a credit check?
For many people in the UK, applying for a loan can come with many different hurdles due to the amount of checks that particular lenders have to carry out when trying to decide how creditworthy an individual is. These checks can include address and employment history checks as well as monthly earnings and outgoings.
All lenders are required to carry out a credit history check as this will provide them with an overall view of an individual’s financial state and their affordability to ultimately be able to repay the loan back. If a credit check was not performed by lenders, the individual applying for the loan could get into financial trouble as they may not be able to afford the repayments of a loan. A credit check is in the best interest of the individual applying for a loan as this will ensure that they are not able to take out a loan which is too big for them to repay.
Can I get a loan without a credit check?
Typically all lenders will perform the following checks on anyone applying for a loan:
Affordability and Credit Checks
Why do UK Lenders require them?
|Identity Checks||Used to confirm your identity and ensure that you are the individual applying for the loan|
|Address and proof of residency||To confirm that you are a UK resident living at the address stated|
|Monthly Salary and Outgoings||Affordability check to assess if you can afford to repay your loan|
|Employment History||To ensure that you have a regular source of income that will enable you to repay your loan in full. However some lenders do offer loans for unemployed people|
|Credit Checks||Carried out by all UK lenders to assess your credit file and to check against any outstanding debt, insolvency or bankruptcy history|
The checks listed above are designed to ensure that that an individual cannot take out any financial product that may get them into financial trouble. By applying for a no credit check loan, there is no way of truly knowing an individual’s affordability and therefore all UK lenders are required to carry out a credit check on all individuals when applying for a loan.
For individuals specifically looking for a loan without a credit check, this can be for a number of reasons. The individual themselves does not have a great credit history and therefore their affordability will likely be affected by this preventing many lenders from offering them a loan. Or the individual does not actually have a credit history due to the fact that may never have turned to additional financial products such as credit cards or loans.
Payday Loans no credit check
A no credit check payday loan is a small loan intended to be used on a short time basis. A payday loan is typically faster and easier to get when compared to loans of a larger value, such as personal loans. If you have a bad credit history and are in need of a payday loan, it may be a wiser option to go for a loan that is specifically targeted towards a bad credit history.
Although many payday loans require a credit check in order for a lender to assess your affordability, some lenders will only carry out a soft credit check which will not impact your credit file.
Other lenders may also carry out an eligibility checker instead of a credit check. An eligibility checker is a series of questions relating to your financial situation, monthly earnings and outgoings and will essentially assess your eligibility for the loan you are applying for. With this in mind, it is very rare that a direct lender will approve your loan without carrying out some form of credit check.
Bad credit loans no credit check?
Unlike many banks and building societies, the online loan application process will provide you with an instant decision. Although no UK lender will offer a loan without a credit check, the credit check itself is carried out instantly, meaning that the online loan application process will only take a couple of minutes to complete.
Although payday pixie does not directly carry out any form of a credit check, we work with a panel of lenders that will perform soft credit searches to assess an individual’s affordability and financial history. We understand that an individual’s credit history can change dramatically over the course of their life which is why we welcome all credit histories.
Why is a credit check carried out when applying for a loan?
- To assess your loan affordability
- To determine whether you will be able to repay the loan in full in the agreed loan term
- To check for any negative marks against your credit file such as bankruptcy or CCJ’s
- Confirmation of your name and date of birth
- Searches for any other forms of finance that you have previously/recently taken out
- To ensure that no one has stolen your identity and has committed fraud under your name
Which direct lenders provide loans with no credit checks?
In short, there is no lender that can offer any form of loan or financial product without carrying out a comprehensive credit check in order to assess an individuals financial behaviour and affordability. A credit check is in the best interests of the individual applying for a loan as this will ensure they are not offered a loan too great in value that they will struggle to pay it back.
Representative Example and Repayment Terms
Wondering how your loan will break down month by month? The example below is based on our standard rates, and should give you an indication of how much your intended borrowing will cost. The rates shown here are for illustrative purposes only. Loans are issued on a case by case basis, according to the applicant's own financial situation. You may find that your interest rate differs from that shown, and your monthly payments will vary according to the amount borrowed and the length of the loan's term.
Our typical interest rate on loans for people on benefits is 93.6% APR.
If you borrow £1,000 at this rate over one year, you would pay back £117.06 each month. The total cost of the loan would be £1,404.72, including interest.
Borrowing the same amount over five years would cost £58.76 per month, for a total of £3,525.60.
Remember, this is just an example. For a full breakdown of your own tailored loan agreement, use our online application form or speak to one of our friendly, helpful advisors. We are here to help you get the right personal loan for your needs, based on your own individual circumstances.
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