No credit check loans are back in the rise. There are a variety of lending providers who can offer assistance to borrowers who have low credit scores. For those of us with bad credit score borrowing can be tough. However, there is light at the end of tunnel the form of no credit check loans.
When you need a loan you need to know exactly what you are getting into. You should try and gather as much information as possible about options in the market. There are many different options, terms and conditions that are required by the lenders. With so many lenders available, you should be careful that you are getting the best deal.
What is a bad credit loan?
As per the title of our post, no credit check loan is a loan that can be an option for people who has bad credit scores. when you apply for a loan from a high street bank, you will go through a comprehensive credit check. If you do have a bad credit score, any defaulted payments from past, you will have a bad credit score.
Bad credit loan is for people with poor credit score. Lenders you provide funds to people with poor credit score know of the risks and don’t run credit checks for applicants. If you need money urgently and do have a poor credit score, a bad credit loan might be one of the options. Standard high street lenders to adhere to more strict guidelines when lending money and credit rating standards that qualify you as a bad credit customer may prevent your access to finance. For a good source of funding options you can utilize the comprehensive guide of Citizens Advice website.
There some other types of personal finance options for people with bad credit: Secured Loans, Peer-to-Peer (P2P) Loans and Guarantor Loans are some to think about.
Why some lenders offer loans without any credit checks?
Like in all business lenders who provide finance without credit checks also aim to make a profit from you. High street banks do manage average citizen’s money, whereas lenders that provide no credit check loans usually deal with their own funds or a small group of investors funds who wants to have higher risk and higher return
Such lenders to take some strong precautions to safe keep amounts they have lent. Therefore you should be careful about some payday lenders sine you may fall into a debt trap and payday lender may claim rights to your wages if you fail to make payments according to schedule. Therefor always be extra careful what kind of loan you are applying for when the lender claims to provide a no credit check option.
What are my options for getting money from no credit check lenders ?
Usually lenders that provide no credit check loans do have high Annual Percentage rates (APR). This is to compensate for taking on a poor credit risk client on as a customer. But this does not mean all your options are bad. You should definitely check on Financial Conduct Authority(FCA) website if you lender is regulated by the FCA. Regulated lenders always provide greater security for your financial well being.
If you do a quick look around, you will see plenty of no credit check personal loan providers and some are offered by well regulated credit unions or online lenders. If you are applying for a high APR loan, make sure to keep the repayment term shorter to avoid paying high interest rates for a long time.