Short-term loans are becoming popular, especially during these unprecedented times. One of the most common short-term loans available today is a same day loan where applicants get the loan immediately after they make the initial application—typically within a day. Due to the degree of urgency, same day loans are also referred to as emergency loans.
Same-day loans are typically characterized by low borrowing amounts and high interest rates. There are different types of same day loans including credit card cash advance, pay day loans, title loans and more. Usually, the loan amount and repayment terms are dependent on the applicant’s profile.
Lenders of same day loans require the approval of your financial profile before making the final decision. As such, they usually do a credit check.
What is a Credit Check?
A credit check is a search or checks done by a lender or a service provider to assess your financial history. Primarily, a credit check is done so that lenders or service providers can gain insights into your credit report.
For the most part, lenders won’t need consent from you to perform a credit check since the law gives them the authority to do it with or without your permission.
Some of the valuable information companies look up from the credit search is whether you have an existing credit and how you are managing it.
Companies are able to acquire a credit report from authorized credit bureaus such as Equifax, Experian and TransUnion. Companies usually do this because understanding your financial habits enables them to make final decisions relative to the information they found.
In the case of a loan, the noteworthiness of a credit check can vary from one lender to another depending on the type of a loan. Bad credit loan lenders, for instance, may overlook some information on a credit report. A credit check can be classified as soft or hard.
Difference Between a Soft and Hard Credit Check
A soft credit check is one that typically provides less (basic) information on your overall financial history enough to help the lender make the final decision. In most cases, a soft check is done by bad credit loan no credit check lenders since they don’t need to go deep into your credit reports to advance you a loan.
The most important thing to note here is that a soft check only provides an overview of your credit history. As such, soft credit checks are not visible to companies hence, don't affect your credit history.
On the other hand, a hard credit check is done by checking and examining the whole credit history of a borrower by a lender. Here, the typical lender would seek the services of a credit reference agency to get the full report. Contrary to soft credit checks, every time a hard credit check is performed, the records appear on your credit history making it accessible to other lenders in the future. Therefore, hard credit checks can have a direct impact on your overall creditworthiness.
Due to the impact hard credit checks have on your credit history, it’s advisable to minimize checks as much as possible. If possible, always use soft credit checks.
When Are Bad Credit Loans With No Credit Checks Allowed?
Offering a same-day loan with no credit check is not common among lenders. Soft credit checks are, however, a requirement for nearly all lenders. Since hard credit checks are what most people consider to be ‘credit checks’, some lenders forgo this process although you have to be wary since you might be dealing with loan sharks.
With that said, a credit check is more likely going to happen even though many lenders and borrowers advertise these loans as being offered without credit checks. This begs the question; is there an alternative way to acquire bad credit loans? Some lenders offer loans based on affordability which is what you should go for in this case. These loans are offered on the basis of your monthly income, financial commitments, etc. instead of basing decisions chiefly on the credit history of the applicant.
Why a Credit Check is Must for a Same Day Loans?
Typically, lenders do a credit check to find your eligibility. Due to the nature of same-day loans, however, soft credit checks are used more than hard credit checks. After all, lenders only want to know basic information about you. To be precise, the amount you wish to borrow has a direct impact on the lender’s decision since it’s what determines the risk level.
If you’re uncertain about whether a lender would perform a hard or soft credit check, it’s imperative to take advantage of brokers who will help you get the services of a lender of your choice.
However, there’s no guarantee that a lender would advance you a same-day loan without performing a hard credit search. Remember lenders follow the guidelines of the Financial Conduct Authority (FCA).
We Connect You with the Most Suitable Same Day Loan Lenders
As you might have guessed, there are many same-day loan lenders in the U.K. Borrowing this kind of a loan can create a snag that’s hard to overcome especially if you have a bad credit history and are seeking a bad credit loan.
UKBadCreditLoans has always worked around the clock to ensure everyone has the ability to access a same-day loan regardless of any other external determinants. As such, we help you make a better decision by connecting you with a reputable and credible lender who can offer you a loan irrespective of your financial profile.
To achieve this, we most likely going to perform a soft credit search to understand your profile before we take the next step. However, while we seek to make your experience better, being a broker means we can’t guarantee that you will be advanced a loan.
As a broker, we emphasize familiarizing yourself with same-day loans since doing so would save you a lot of trouble in the future. To be precise, same day loans with no credit checks really don’t exist—supposing the lender is authorized by the FCA because doing so is going against the code of conduct. This also highlights the importance of using a broker instead of trying to secure a loan by yourself. A broker is more likely going to protect you from loan sharks.
As an individual, there are basic aspects of same day loans you ought to know. One of them being the frequency of borrowing. Try making few applications as much as possible. The goal here is to make sure your credit history is always clean and appealing to lenders for easy borrowing in the future.