How Does Payday Loans No Credit Check Work?
In the UK, lenders are legally required to run credit checks before offering any kind of loan, so in the case of ‘loans with no credit check’, a soft check is performed instead. The information gathered from a soft check most of the time would be enough to understand your financial situation and enable a decision to grant a loan.
|How much can I apply for?||£100 to £5,000||Zero-obligation quote|
|Length of the repayment||1-36 months||Quick payout|
|Interest rates (variable)||49.7%||Zero paperwork|
|Can I apply with poor credit standing?||Yes||Bad/low credit considered|
|Do I have to pay a lump sum?||No||Flexible repayment|
|When am I allowed to apply?||24/7||2-min simple application|
What Are Credit Checks Exactly?
UK regulations require lenders to always run credit checks on whoever applies for any type of loan, including payday loans. Credit checks are attempts to view your credit file in order to understand your financial situation.
Almost everyone in the UK has credit files at least at one of the four main reference agencies. The file records information about how you have managed your money over the past few years. Depending on how far lenders want to see through your credit file, there are two types of credit checks:
Soft Credit Checks
Lenders run soft credit checks to get a brief overview of your credit records. The overview is used to understand your financial situation and assess your chance to get loans without conducting a full search of your credit history.
Soft credit checks cannot be seen by other lenders or companies that look for your credit file in the future. It would also have no impact on your credit score.
Hard Credit Checks
Lenders perform hard credit checks to see the full view of your credit history in order to get a complete understanding of your financial situation. Everything will be visible, including every type of credit account you own, the amounts you owe and pay, and any payment you missed.
Hard credit checks performed by lenders will be recorded to your credit file within a 12 months period. So, anyone searching for your credit file at a later stage would be able to view it. In some cases, this could damage your credit credibility especially in getting loans from other lenders.
Is There Really No Credit Check?
The quick answer is no. UK regulations state that lenders must run a credit check on whoever applies for loans even if they are willing to overlook the bad credit.
So why do they call it ‘no credit check’ if they still run credit checks?
It is mostly because many people look for loans specifically with the term ‘no credit check’. Lenders use the same term so that people can connect to them more easily. Another reason is that lenders generally only run soft credit checks that won’t impact your credit ratings. They do it just for the legal requirements and not as criteria to decide whether you qualify for loans. So it is as if they don’t run any credit checks at all.
Can I Get a Payday Loan If I Have a Bad Credit?
While it’s going to be easier to qualify for loans if you have good credit, recently many lenders are willing to overlook bad credit and instead focus on your current capability to pay back any types of loans, especially short-term ones like payday loans.
This is due to the realisation that people have bad credit for a variety of reasons, many of which may have nothing to do with how they manage money. So, as long as you can clearly prove that you have the ability to repay the loan, there must be lenders that offer the right bad credit loan options for you.
How Can UKBadCreditLoans Help Me Borrow Money?
Our service matches your loan necessity to reliable lenders that may offer the right loan options for your circumstances. We notice that searching for lenders, at times, could be difficult and time-consuming. That’s why we want to help you connect to your potential lenders more easily and quickly. How? Do the following steps:
- Submit your loan request: Fill in the application form on our website so we know what kinds of lenders you are looking for.
- Receive offers: Get quotes from potential lenders and start comparing rates.
- Get the money: Receive the money within a few days of your approval.
Looking to Borrow Money Easily?
Representative Example: Rates from 43.1% APR to 1333% APR. Minimum Loan Length is 1 month. Maximum Loan Length is 36 months. Representative Example: £1,200 borrowed for up to 75 days. Total amount repayable is: £1506. Interest charged is 0.34% per day, amounting to £306, annual interest rate of 124% (variable). Representative APR: 49.7% (variable).
Can I get a payday loan without a credit check?
All regulated lenders in the UK are required to run credit checks before offering any loan options, including payday loans. However, many of them are willing to only perform soft credit checks that don’t affect your credit ratings and not to use the ratings as criteria to judge your qualification. So, the credit check won’t matter at all.
How can I improve my credit score?
First, you may want to check your credit report to see if there is incorrect information that causes the bad score. Next, you are recommended to develop the following habits:
- Always pay your debt in time.
- Lower your credit utilisation rate.
- Don’t apply for new accounts too often.
- Always check your credit reports regularly.
What if I can't repay the loan?
Lenders would charge late repayment fees whenever you can’t pay your debt in time. In the case that you have difficulty completing the repayment, it is recommended to openly discuss it with your lenders and see if they can offer any solution. Intentionally avoiding your lenders could lead to even worse results since they may sell your loan account to a collection agency.