Loans without credit checks are not available anywhere in the country. Every responsible lender conducts a few credit checks before applying for a loan. It helps the lender understand the borrower’s capability to afford the loan and interest terms. Likewise, he provides approval on the loans.
Payday loans are short-term income-based loans that an individual can apply for. Just like any other loan, direct lenders conduct a credit screening process here as well. However, the credit check does not impact the credit score. In same-day loans like payday loans, the primary way to qualify for the loan is – income. If a borrower reveals the affordability by providing an authentic income source, the lender approves the loan.
So, if you ask-
Can I get a payday loan without a credit check?
No, you cannot. Whether you need just £1500 for your needs, lenders must conduct a nominal credit check. It helps provide the exact amount that you can comfortably pay back with your present circumstances and financials.
“Okay, but how does that help me?”
How does a minimal credit check help the borrower?
If you need a payday loan urgently to finance a need, what do you check first? APR and total loan costs. Right? It helps you decide what is suitable for your finances.
Similarly, a credit check helps you get a peep into the amount and terms you can realistically afford. It prevents you from borrowing more of what you can pay back. Here are other benefits of payday loans with limited credit checks:
1) Quick loan approval
Lengthy loan processes, collateral, guarantor and detailed credit score analysis make the loan process lengthy. However, when one applies for payday loans, he needs urgent cash. Thus, no credit check facility allows the borrower to get fast money in the account. Moreover, it eliminates any detailed documentation or form-filling requirements.
What could be better than getting cash in the account within 15 minutes only with a few checks?
2) Prevents further credit score damage
A no-credit-check payday loan does not leave any impact on your credit profile. It helps you qualify just on the income slip or the proof that you provide on the loan. Thus, unlike other long-term loans, your credit score remains the same at the time of approval.
However, if you skip payments or cannot pay, the loan may enter default. It may impact the credit score significantly. Otherwise, it stays the same.
3) It helps understand the affordable amount
Borrowing right is better than paying extra on the interest costs and terms. Some individuals struggle to decide the amount they can afford to borrow. It is where the lenient credit checks help.
It helps one decide the amount you can afford to borrow and pay, including the interest and loan fees. Thus, you can save extra money by applying for only what you can pay back. In this way, the regulated credit analysis standards help individuals safeguard their financial interests.
4) Prevents from debt-trap
If you borrow the exact amount that you can comfortably manage within an existing financial frame, you can prevent debt. This is because fixed-rate payday loans grant one budget flexibility and choose the repayment structure accordingly.
5) The check would not be visible to other lenders
It is one of the best benefits that Payday loans come with. As it is a no-credit-check loan, no other lender could see it on your report. It never gets recorded. Thus, it is the reason your credit score remains the same at the time of loan approval.
With this flexibility, you can qualify for other loans with the same credit score. However, non-repayment or payday loan debt may make it harder to qualify for affordable loans.
This is how a payday loan with a limited credit check helps the borrower.
You may be eager to know- “What if lenders provide a payday loan without one?”
Let us know.
What happens if lenders provide loans with ZERO credit checks?
As you can see from above, credit checks are an important part of the loan approval process. Alternatively, if you get a loan with literally no credit check or zero check, the situation would seem like this:
- You may borrow a higher amount
Under no conviction or detailed guidance on the appropriate amount to borrow, one may borrow a higher amount than one can pay back. However, lenders never provide loans to individuals who cannot meet the terms and affordability criteria. They analyse this through credit checks only.
- Fail to budget for repayment
Without a proper check, you may end up borrowing a high amount.
How would you be able to budget for something that you cannot afford? What about the liabilities? You may skip other payments like rent, child school fees and bills to pay the loan payments. Alternatively, the budget may fall apart. You may find yourself deep neck in debt.
c) Miss repayment continuously
Under this deep financial pressure, you may skip payments one after the other. It may not be helpful in any case. Eventually, missing payments continuously impact your credit score. You may default on the loan. Later, lenders may have a CCJ against you. It would further impact your credit. The court may advise and order you to clear the debt within a specific date.
d) Ruin your mental peace, financials and savings
What happens when you cannot decide on the next take?
Frustration follows. Though you may be earning well, you will not be able to save in this case. When liability rises more than your income, the worse awaits- BANKRUPTCY.
How can you avoid this financial Trouble?
You can avoid all this hassle by choosing a regulated and authorised fast loan lender that provides payday loans with regulated credit checks. It would help you borrow right, make timely payments and keep your financials in good shape.
Check and explore the lenders who :
- Provide a loan only after conducting a credit check
- Have a genuine firm address and contact details
- Lends you an amount that you can afford comfortably
- Helps you with payment management in case of financial fall
- Agrees to re-schedule payment to pay lower monthly payments
- Guide through all loan costs ( also the hidden ones)
So, a loan with a credit check is a must. Payday loan lenders prioritise customer’s comfort and safeguard their financial interests with one. Moreover, the credit check prevents the lender from lending and borrowing from borrowing an unrealistic amount that he may not be comfortable paying. It prevents the hassle of defaults and credit loss. Thus, always prefer lenders that share a standardised process to provide payday loans.
Lisa Ann has developed a well-experienced professional career. From managing the staff of more than 50+ loan experts at Fastmoneyfinance to boosting the delivery of various loan offers, she has acquired many challenging roles to come out with the best results for the company. Lisa Ann is a Senior Content Author and the Chief Financial Advisor at Fastmoneyfinance. To back her massive experience in the UK’s financial industry, she has the postgraduate degree and diploma in Business and Finance.