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If your credit score is poor or you have yet to get your credit history established, getting a loan may be a bit difficult, but it is not entirely out of the question. Your options may not be as plenty as when you have a good rating, but there are things you can do to get around it.
No Credit Check Loans
These are usually unsecured loans that are ideal for borrowers with financial issues. Credit scoring has always been the reason for loan rejections and if you think that your score is not up to par to what lenders require of regular and standard loans, a loan that does not run a credit check on your financial history may be the only option left. Be aware though that these loans tend to have some disadvantages attached to them. For instance, you’ll have to deal with stricter terms. The interest rates are generally higher as well so expect that they will be generally more expensive. Also, it is best to only consider this option as a final resort.
Skipping the credit check
Credit checks are part of the important procedures that lenders have to do when assessing loan applications. This is their way of confirming your identity and ensuring too that you are in a situation where you can afford to pay back the money you are borrowing.
However, if your credit is bad, one way of getting lenders to look beyond your abysmal score is to offer something that can reduce the risks involved in the loan. For instance, you can offer to present a guarantor, a third party that will provide assurance of repayment in the event that you default. A guarantor can be anybody you know as long as he has a good credit standing. Loan terms and the amount you can borrow will often depend on the guarantor’s credit score.
Secured loans are another ways for you to get a loan minus the credit check. Just like a guarantor loan, you are offering something to lessen the risks for the lenders when granting you the loan. This time, it is in the form of an asset like a property or a car. Loanable amount depends on the value of the asset. But it does carry the risk of you losing your asset in the event that you fail to pay off the loan.
Credit unions can also be a good place to get a loan if you want to skip the credit check. They offer good loan deals and lower interest fees. However, there is the downside of you needing to be a member of the credit union first before you can start borrowing money. So, if you are in an emergency, this might not be as ideal a choice.
If you do not trust that you have the necessary credit score to get approved for a loan, you’d probably be a little cautious on whether to apply for a one or not. Still, there is no telling when you might need some extra cash boost and it helps if you can find lenders that will no longer need to perform a credit check on your application.
No Credit Check, No Guarantor Loans in the UK
In the UK, all licensed lenders are required by law to perform a credit check. This comes from a good place though as this is supposed to protect people against borrowing money that they cannot really afford to pay back, which might push them into further financial difficulties.
Regardless of the type of loan you are getting, there will always be a credit check. But if you will choose to get a short-term loan such as a payday loan, lenders will not do a hard inquiry- something that is done for standard loans. A hard credit check is what you want to avoid as not only will this affect your credit score, it is likely to lead to a loan rejection.
No Credit Check Lenders
When you choose to get a payday loan, lenders will not only be concerned with your credit score. So, it would not bother them that much that your score will have dents and bumps on it. What they will look into though is if you can prove that you will be able to afford the loan. While there are lenders that would require customers to be regularly employed, there are also those that would only need borrowers to show that they are receiving a regular income monthly that will be enough for them to cover the repayments.
Do remember that once you are approved, it is important to manage the loan right. No credit check loans tend to have high interest and costs. This is why it is necessary that you pay them on time to avoid getting charged penalties or other additional fees.