It is no doubt that poor credit scores make it hard for you to avail loans but in the hindsight, there are lenders and lending agencies who offer a “No Credit Check Loans UK” in your time of need and is done without carrying an extensive and comprehensive review of your credit history.
How are Standard Loan Providers Different from No Credit Check Loan Providers?
Standard loan providers are known to run an extensive credit history check and a background check as well to ensure that you are in a position to pay back the borrowed sum. No credit check loan providers evaluate you entirely on your ability to pay back the borrowed sum.
The standard loan interest rates are lower as compared to the no credit check loans UK because the no credit check loans UK are usually a small amount with high-interest rates and due to the nature of such loans it is a small risk from the lenders perspective.
Can you Avail Loans with Poor Credit Scores?
In simpler words, a No Credit Check Loans UK helps to ensure that you have access to emergency finances during the time of an emergency or when something unexpected happens.
And a credit company that offers a no credit check loan will assess your current situation including if you have a stable job or not instead of running a comprehensive background credit check.
The main difference between a bad credit loan and a standard loan is that the interest rate is much higher and also if you fail to pay back the borrowed sum on time the interest again is more than the standard loan interest rate.
Taking a No Credit Check Loan UK, does it affect your credit rating?
A very frequently asked question is that “Does it affect my credit rating if it is already bad?”
It is a genuine concern of many. But the truth is that it can actually help improve your credit rating considerably. As it can be looked as a chance to show your trustworthiness to the borrower.
If you pay the borrowed money back on time, it can help convince other lenders in the future that you are not much of a financial risk to them.
Getting a Loan without a Formal Credit Checking The UK
It is a rule in the UK that no lender can provide loans with a credit check, because if they did, that would be breaching the regulator’s rules.
The rules and regulations in the UK for short term finances has become much more stricter in recent years, for example, there are certain restrictions on:
- Number of times a loan can be refinanced
- Interest rates a lender charges
- The amount a lender can ask you to pay if in fees if you default on the loan
Strict actions are taken if the lender does not comply with the rules. In case a lender does not comply they will be penalized or they will be asked to compensate the customer who may have been treated unfairly
With this being rule, lenders and lending agencies conduct a soft credit check, it nothing but an inquiry of your credit file to look at certain information on your credit report.
Lenders conduct a soft credit check to determine how successful your loan application is without having to conduct a thorough credit check.
And a soft credit check does not reflect on your credit rating, hence there will no impact on your credit ratings.
No Credit Check Loans UK Features
There are certain features that set no credit loans apart from the regular loans
- They are easy to apply for and in most cases the result is instant and the procedure too is an easy one with fewer hurdles to overcome.
- Soft credit check, this kind of credit check is good for both, the lenders and borrowers as it helps the lender assess the borrower’s capability to payback and as for the borrower the there is no change in his/her credit rating.
- Small loans such as the £500 loan, no credit check loan are made available to people in need of it
- Short term loans, since the lenders lend a small amount of money, they lend it only for a small period of time as it reduces the risk they are faced with.
- High-Interest rates are considered as a drawback because when compared to the standard loan interest rate, small loans have a much higher interest rate. The only way to pay low interest is to repay the loan back in the shortest time possible.
- You have the option of choosing the duration of your loan term and the maximum they extend is up to a year but you cannot always choose the amount if the lender think you are incapable of paying back the money he may give you a lesser amount which the lender thinks you are capable of paying back.
Types of No Credit Check Loans UK
There are several types of No Credit Check Loans
- Bad credit loan
- Payday loan
- Unsecured loan
- £500 loan
- £1000 loan
In today’s world where the need for money can just pop out of nowhere, services and offers such as this are always of great help for people to have a relaxed mind, though it isn’t a free service.
But no doubt the “No credit check loans UK” will definitely help anyone during their financial needs.
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