What Are No Credit Check Loans

Most loan or finance applications involve having a credit check with the major credit bureaux

, as a means of assessing the application. The lenders look at your payment profile to check whether you have any credit and if you do are you making regular payments to it, they are also looking to see if you have any defaults or CCJ's (County Court Judgements). A no credit check loan is quite simply a loan that does not require a credit check to be carried out.

Although the finance and in particular the loans industry in the UK has been devastated by the world wide recession, there are still a number of options open to those who may have had a chequered credit history and need a loan without having a credit check carried out;

Payday Loans

A payday loan is one type of loan that does not always need a credit check, although some lenders now do carry out a low level check. A payday loan is a short term loan between 75 and 850 that is repaid in full on your next payday. The lenders usually charge a flat fee of between 20 and 25 for every 100 borrowed. In order to qualify you will need to be at least 18 years old, be in full time employment with your salary being paid into a bank account with a debit card facility. You must also have enough disposable income to repay your loan in full on your next payday.

Logbook Loans

This type of loan is a loan that is secured on your car logbook and is underwritten based on the value of your car. Currently (November 2010) none of the logbook loans lenders on the UK will carry out a credit search to assess an application. You can borrow from 500 to 50,000 and to qualify you will need to be the legal owner of a car that is clear or nearly clear of any finance, you will also need to be able to repay the loan by whatever means not necessarily employed. The logbook loans lenders are quite likely to charge a higher rate of interest compared to a normall personal loan.

Guarantor Loans

This type of loan is underwritten based on your guarantors' details and not yours, and you can borrow up to 5,000. The lenders do not carry out a credit check on the applicant because they are more concerned with the guarantor. In order to qualify for this type of loan, you will need a current account that your full time salary is paid into, and will need to have a suitable guarantor in place to endorse the loan. To qualify as a guarantor your co-signee will need a good credit history, will need to be a UK homeowner with enough income from any source to justify the loan.

Loans From Friends

Obviously if you are looking to borrow from a friend or colleague they will not carry out a credit check on you first. This type of lending has increased significantly as a result of the recession according to the latest research from the post office. In the last 12 months alone lending to the tune of 7 billion has been lent to friends, with apparently 3 billion yet to be repaid.

In Summary

There are a number of options open to anybody wanting a no credit check loan, but it is important to remember that it is advisable to read the small print and seek independent advice before you agree to anything!

by: Steve Smith

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