Are Same Day Loans Approved Without a Credit Check?

Are Same Day Loans Approved Without a Credit Check

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There are a few details required when you apply for a same day loan. These details are used to provide the lender with a good understanding of who they are lending to. As a result payday loan companies may perform a credit check before approval.

You will be required to supply personal details such as employment details, salary, bank account information and residential status. What this ensures is that you, the borrower, are equipped to pay the money back to the lender. For example, it is usually stipulated that you should have a monthly salary of no less than 500, although this can vary between lenders.

All this information is given to a lender before they make a final decision to approve the borrower the loan. However they may sometimes also run a credit check; it's becoming increasingly popular and there are a variety of reasons for this.

Firstly, lenders are finding they have to become more responsible about lending money. Given the recent global financial crisis, it's crucial they act responsibly to ensure the lender is able to pay the money back. Secondly, this is to safeguard themselves; a payday loan company want to make sure they are going to actually receive the money (plus additional interest costs). Finally, and most importantly it's to make sure that the person looking to borrow money are actually in a financially healthy position to pay the money back - they don't want to lend to someone knowing full well the costs and implications if that person couldn't pay it back.

Same day loan companies will verify the information provided via various national databases. This isn't to catch people out; on the contrary, it's really just to ensure responsibility and trust. Therefore, if you feel that you have had a poor credit history in the past, but are currently on sound financial footing then don't worry, the credit check is just to check people that have a consistently poor history of repaying debts.

These types of credit checks are not as rigorous as a credit check for bank loans or mortgages. Seeing as these loans are short term and the amount you borrow is a lot less than with a bank loan or mortgages, it isn't necessary to run a thorough check for someone looking to borrow a couple of hundred pounds for a few weeks or so.

Most payday loan companies are able to approve an application within an hour; however this does vary between lenders. In fact, it's in the interest of the borrower to provide as much accurate information, and allowing a credit check will give you a better chance of your application being successful. This is because they are able to quickly check your information against the various national databases and come to a conclusion sooner.

If you have a chequered credit history and feel that you won't be approved a quick same day loan, then you should know that each application is based on your recent circumstances and ability for repayment. In this case you will most probably be approved. However this is partly why the interest rate of these loans is so high; it's to safeguard the lender against those not making the payment.

Interest rates can rise as high as 2000% - in actual terms it's about 25 for every 100 you borrow, either way it's pretty high. This is why these types of loans should only be utilised as a quick and short term financial solution. If you feel it's not adequate enough for your needs it may work out better to take out a bank loan; which will give you a long term repayment option instead of racking up huge charges and fines with a same day loan company.

To summarise, there are some core considerations with payday loan companies, first and foremost it's about your salary and employment status; however credit checks are also sometime taken into consideration. Regardless of your previous credit history, the check is to determine your current status for repayment.

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