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No Credit Check Loans: How do they actually work?

No Credit Check Loans: How do they actually work?

No Credit Check Loans: How do they actually work?

No Credit Check Loans for the UK

Keep an eye out for companies promoting a no credit check loans policy in the UK, no credit check loans is actually hearsay. Loan Bird will only perform a soft search to place you in touch with our suitable lenders.

First things first, rest assured our service will NOT affect your credit score. So, when we introduce you to our lenders you will be able to decide which loan option suits you best.

A soft search or no credit check?

We’ve put together this article to explain in further detail how our service works in reflection to no credit check loans. Some customers have previously asked if this service can damage their credit report. Loanbird.co.uk will only ever conduct soft search to provide you with some loan options.

The lenders we provide will make their own decisions on whether they need to do a full credit search. This will only take place if you choose to accept the loan that particular lender is offering.

Loans without a credit check

It’s been a difficult financial year for many of us. With the looming threat of Brexit and many of our favourite high-street brands going under. So, it’s safe to say that money has been tight. That’s why so many brits are looking towards their lending options. Whether it’s to clear off existing debt, get a holiday sorted or even just to treat themselves.

No credit check loans are, alongside bad credit loans and payday loans, as one of the most popular marketing tools in the UK. People are generally more likely to apply with companies who promote this. It gives the browsing individual the impression there is much less of a risk to their credit score. This activity of illusion exists even though the lender might still carry out a credit check.

Why are there so many searches for no credit check loans?

There is a particular reason why no credit check loans is such a highly used marketing strategy. It’s due to it being an increasingly popular term that borrowers use when searching for funds. This boils down to the art of advertisement and elusive promotional values, even though the term isn’t an actually a product.

If you are declined for a loan then your credit score is likely to suffer, that’s a given. In turn, this will make you less likely to be approved for credit in the future. Or can significantly reduce the lending options that are available to you, it really is a vicious cycle.

The people who need access to credit the most are often the same people who are likely to be declined from traditional lenders, such as banks or other brokers.

UK loans with no credit checks

Answering your questions

No credit check loans are sometimes promoted as a type of short-term/long-term lending option. They have been around for a while, so if you’re still reading this you might have a few questions relating to them.

We’ll try and answer some for you, the below are what previous customers have asked us:

Are no credit check loans safe?

This is a difficult question to answer for certain, as there are so many lenders out there who all offer similar methods of short-term lending.

Another thing that consumers should consider is the definition of safe. Here at Loan Bird, your information is safe and secure, so you’ll never be at risk of your data being passed on to anyone else.

Similarly, when you agree to a loan with one of our providers, they will stick to the terms and conditions as outlined in your agreement. Meaning, you won’t receive any unexpected charges, fees or interest increases.

Whilst it’s difficult to comment on other providers, we know our process and service is safe.

What exactly is a no credit check loan?

To put simply, a no credit check loan is just that: a loan paid to an individual, without a ‘hard’ credit check being completed.

Truthfully, lenders should be completing a ‘soft’ check on your credit file. This will gauge the lending risk and make a decision on whether to accept you as a borrower. If you’re not initially approved, it will NOT affect your credit report.

A no credit check loan will only ever show on your credit file once you’ve been accepted. This means that your repayments are still tracked for future creditors to see. This can provide you with an outlet to start building up a lower credit score.

Who might need one?

A no credit check loan would mainly appeal to people with poor or limited credit histories. The most common type of applicant will be someone who has recently been declined multiple times for loans from different lenders.

A no credit check loan can be very beneficial to someone who may not be eligible to receive credit from high street banks or hire-purchase agreements, as it allows quick access to funds with minimal effect on their credit file.

Do you need a no credit check loan?

Perhaps you don’t have a reliable credit score, or perhaps you’ve recently been declined for multiple loans with other creditors.

A no credit check loan is a type of loan in which a lender will not carry out a hard credit check. This makes it a good borrowing alternative to those who may have a poor credit score, or a limited credit history. Or even for people who are worried about a mark being left on their credit file.

Why is the interest rate higher than bank loans?

You may have noticed that personal loans offered by high-street banks are, more often than not, very competitive with their interest rates. In most cases, they are much lower than that of no credit check loans, payday loans and bad credit loans.

We aim to be as transparent as possible with our customers, and the reason that these types of loans come with higher interest rates (in some cases) is that they are a higher risk to some of our lenders.

A traditional bank will run a thorough credit check on you, taking into consideration your payment history, your credit score and any outstanding debts that you might have.

When you apply for a soft search loan, lender’s will also be mindful of affordability. Sure, they might run a soft check for security purposes, but this will not leave a mark. As we don’t have a full picture of your financial situation, we can’t consider any defaults or missed payments you might have had in the past.

In order to ensure that we recover any potential funds, the interest rate is higher than a typical loan. Don’t worry though, as the balance comes down, the interest payments will, too.

credit checks with no credit check loans

Credit checks

A credit check will be completed by any regulated lender before you are considered for any type of online loan.

This is when a creditor will use a credit reference agency to view your credit report. Basically, this will give them access to see your credit score, and your repayment history. Any amount of money borrowed, along with any defaulted payments from the last 6 years will also be shown on your credit file.

There are two particular types of credit checks: a hard check, and a soft check.

The only difference between these is that a hard credit check will leave a mark on your credit file.

This shows that your file has been accessed, and will also detail whether you’ve been approved or denied for a loan. A soft check will NOT leave a mark. Although it may not be able to provide as much information as a hard check would.

Any declined applications may affect your credit score negatively. Meaning a decrease in the likelihood of being approved for a loan in the future.

interest rates and repayments with no credit check loans

Interest rates

As the risk of lending cannot be accurately attained, the interest rates applied to a no credit loan may be considerably higher than guarantor loans or personal loans.

Your interest rate will be worked out based on the soft check. This will not show a completely full or accurate credit history, the lender will perceive a no credit check loan to be a higher risk to them.

No credit check loans have similar interest rates to payday loans, often between 150%APR – 200%APR.

Repayments

The repayment schedule varies from loan to loan. A no credit check loan is exclusively a short term advance, though agreements can be made to make monthly repayments. These are not usually recommended due to the balance increase associated with high interest rates.

A no credit check loan is often treated as a type of payday loan, with the full balance being repaid within one month.

Paying off a high interest loan quickly will decrease the total amount you have to pay, as there is less time for the interest to add to the balance.

Is there a credit footprint with Loan bird?

Some of us might have bad credit but earn an good enough income to support each loan repayment. Can you even get a loan? Are you apprehensive because of a credit search? There’s lots of questions you may ask yourself.

There are plenty of options out there to help you, even with a past of poorly managed credit. Because we use a soft search only you have the option to walk away from any proposals without a dint in your credit score.

Most of us have been in a situation where a lender has rejected the application. Inquiring for a loan with a lender directly will no doubt leave a credit footprint. We’re here to show you some options before the need of a credit check.

Can I be declined?

In short, yes – but it’s not very likely.

The point of a no credit check loan is to gain access to credit without being declined. This gives you the opportunity to know if you’re likely to be successful. If you are when paying it back it can actually increase your credit score, making you more likely to be accepted for credit in the future.

If we believe that you’ve been untruthful in the application, or, if we believe that you’re applying for a loan for fraudulent purposes, we do have the right to refuse a financial advance.

Don’t worry if you do get declined – feel free to get in touch and we’ll be happy to discuss this further.

What’s a soft search?

We will never pursue or leave a note on your credit report. The service we offer is pretty much as close as it gets to what a no credit check loans service should be. So, rest assured when using LoanBird.co.uk there won’t be any nasty surprises. We realise your credit rating is precious, and we want you to keep it in tip-top condition.

Loanbird wants to provide a platform to help your chances of obtaining a loan, not to affect your chances of gaining any form of credit.

Also to add, with us you can see if you’ll be accepted for one of our loans before you choose a lender. Our application process only requires brief details e.g. employment status and if you have an income.

We only need this information to help assist you in finding the best possible options.

no credit check loans soft search

How quickly will I get the money?

If you apply directly through Loan Bird, you’ll be able to access the funds within 24 hours with some lenders!

Applying with loanbird

Applying for a no credit check loan can be very overwhelming due to the amount of different creditors, and the different options available. Some creditors aren’t always clear whether you’ll be applying for a payday loan, or a bad credit payday loan.

Loan Bird have taken that challenge away, and will allow you to easily apply online for whichever loan you think is right for you.

If you’d like to go ahead with a no credit check loan, Loan Bird search the best deals from the most reliable lenders.

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