“Credit Score is the most accepted requirement for a guaranteed loan approval.”
The main purpose to start here with this line is to reflect the importance of having a credit profile. It is good that you are confident on your smooth financial life, but you may know overconfidence can be harmful. You are fortunate to earn a stable monthly income. It can turn into unfortunate once you lose your job. Thus, loan can become a necessity at some point of time.
Keeping a good credit score is always crucial because the lenders accept it as the primary factor to approve your loan application. What would you do if you lack a good score? Answering this question may be difficult, but not impossible. No credit check loans are there to use for exactly the same situation.
Lenders are not going through the credit history of the borrowers, is the main feature of these sorts of loans. Few years back, it was not included in the lending policies. Now, it is well into the practice. Explaining the real concept behind the loans can only be possible through the general questions asked by the people on them. Here are some examples along with their answers:
Question 1: Does the lender not check the credit history?
The general perception behind the loans is that the lender does not check the credit history. Most of the people understand the same. However, the reality is slightly different. No lender can approve the applications without going through the credit history. Every lender does that, but the real difference is ‘soft or hard’ credit check. Here, the no credit check is largely related with the soft credit check where the applications are not rejected despite bad credit history.
Question 2: How lender approves the applications if credit history is not checked?
Well, it has been among the most common questions that come in everyone’s mind. If not the credit score, the lender will then want to see the income status, the presence of the responsible guarantor or the available collateral. The borrowers have to make sure that they fulfil either of these conditions to make their applications stronger.
Question 3: Are the interest rates always higher?
The interest rates seem to be a concern here. The loans with no credit check are the part of short term funding, which usually have higher rates of interest than the long term funding sources. The borrowers have to agree upon this in order to apply loans, but it is not the only thing happens. Few lenders in the FinTech Market of the UK charge competitive interest rates on the loans.
Question 4: Is paperwork required to apply for the loans?
The days are passed now when the borrowers have to submit many papers alongside their loan applications. Now, the time has changed thanks to the FinTech Market. The application procedure is now entirely online based, which sometimes do not require any paperwork from the borrowers’ end.
Question 5: Does lender approve the loans on instant approval?
The answer is ‘yes’. Loans are approved on an instant basis. It is possible because the lender does not perform hard credit check and not many documents are there to examine. As soon as the lender receives the application, it verifies everything instantly and disburses the funds to the borrowers’ valid bank accounts.
Question 6: Is collateral mandatory or not?
No one wants to put his or her home or car as collateral while applying for the loans. These loans give such liberty to the borrowers because they can be applied in an unsecured way. It is indeed a risk-free funding for them and an ideal to get a peace of mind.
Question 7: What about the guarantor, is it compulsory?
Arranging a guarantor has always been a major concern of the borrowers with poor credit history. No one wants to take the guarantee of those, who have a bad record of making repayments. Thus, few lenders are ready to accept the applications with no credit check and no guarantor claim. However, keep an eye on the interest rates.
Question 8: Can you Use Loans to improve my Credit Score?
Yes, why not. In fact, many individuals apply for the no credit check loans for exactly the purpose. Improving the credit score is necessary because it will open the door for more lending opportunities. The borrowers can make this possible by making the full use of small repayments of the loans. If they do timely repayment, then enhancing the credit profile becomes easy.
Question 9: How you choose the right lending company?
This is indeed an important point. Choosing the right lending company for no credit check loans in the UK is the most important task because you are applying with bad credit and does not want any further trouble. You should do a proper online research to compare the prices of varied lenders. It will give you a proper idea on which lender can sincerely provide the loan benefits on the affordable APRs and repayments.
Question 10: May you use loans for any financial purpose?
The general trend is that the lender wants to know the purpose behind taking a loan. It gives an idea to the lender about how much amount can be granted and what the interest rates can be finalised. But with the loans for no credit check, they seem not interested to know the purpose. They know that these borrowers already have a bad credit score and the repayments are assured with their income status.
In the nutshell, the efficiency of the loans definitely increases when the lenders attach the benefit of no credit check with them. Once you apply for the loans, leave out any other worry and you will get an SMS to your phone mentioning amount has transferred to your bank account.