If you’re in need of quick cash for an unexpected expense, but you have a poor credit score or no credit history, loans with no credit check may be a good option to give your financial health the boost you need.
What is a no credit check loan?
Life is full of surprises, and not all of them are welcome. No matter what your credit history or level of financial planning, you can never know what unplanned expenses are just around the corner. From smashed laptops to emergency travel costs and unplanned vets’ bills, unexpected bills are sadly never far away.
Having a bad credit score or no credit score can make finding the loan you need a stressful process. At Loans Institution, we believe that bad or insufficient credit history should not be an insurmountable barrier to receiving the funds you need.
Loans from £5000 - £50,000 in hours
- Get the loan you need in your account by hours.
- Up to 72 months
What is a credit check?
This review helps prospective lenders see how you have handled credit in the past and gives them an indication of how likely you are to repay your loan and therefore how much a risk you would be to them, should they choose to lend you the money requested.
It is important to note that there are two different types of credit check. A soft credit check and a hard credit check – the difference between each of these is explained below.
What are hard credit checks?
A hard credit check is when a lender reviews everything on your credit file.
This is the type of check a finance provider or building society will use if you are applying for credit. They look at nearly every type of account that you have where you make regular payments, for example, credit cards, mobile phone bills and mortgages.
Also they check your credit file to see if you have missed any payments. They can also normally find out what your overall level of debt is (both your unsecured and secured debts).
Hard credit checks stay on your file for 12 months although some, such as debt collection checks, can stay on your file for longer. Every company who looks at your file can see who performed those checks and why.
What is a soft credit check?
A soft credit check is an enquiry into your credit file to look at certain information on your credit report.
Companies perform soft searches to determine how successful your loan application would be without needing a ‘hard’ credit check.
It is like a background check to get a quick indication.
What are no credit check loans?
No credit check loans lend money without checking your credit history and if you can afford the repayments.
Advantages of No Credit Check Loans
No-credit-check loans have an easy application process and are typically approved very quickly, allowing you to get a loan without any worry about your credit history. There are usually no prepayment penalties. Plus, paying back your installments on time helps build your credit score as your payment activity is reported to major credit bureaus. This way, you can improve your credit history, improving your chances of an even better deal next time.
Disadvantages of No Credit Check Loans
The main drawback of no-credit-check loans is the potentially higher cost associated with them. A loan with no-credit-check can come with a higher interest rate. So make sure to check the interest rates from your specific lender. There is also a limit to how much you can borrow depending on the lender and state regulations, so you may not be able to get the amount you want. No matter what type of loan you’re considering, it’s important to research the lender and the terms. This could save you a lot of money in the long run.