No Credit Check Payday Loans
The short answer to the question – Do no credit check loans exist? is Yes. However, a more full answer would be that, while they do exist, they shouldn’t be offered by lenders – in the UK in any event.
What is a credit check?
A credit check is defined by Collins English Dictionary as ‘a check performed by a company selling goods on credit to establish if a potential customer is creditworthy.’ But do no credit check loans exist? So, when you apply for a loan, the moneylender should check your past credit record to evaluate how likely it is that you will almost certainly repay the loan. A credit check, or credit look, will demonstrate whether you have figured out how to repay loans you have taken out previously, or whether you have rather attempted to meet your commitments. A credit check will appear: A credit check will show:
- Any County Court Judgements enlisted against you before
- Any previously missed payments or defaults on loans, credit cards, hire purchase and other borrowing
- Any events on which you have been announced bankrupt, or have gone into a formal indebtedness plan, for example, an Individual Voluntary Arrangement
- Occasions on which you have been overdrawn
The lender will then use this information to decide whether to grant you a loan.
Do no credit check payday loans exist? The rules.
Payday lenders and brokers offering access to comparable short-term individual loans should be approved by the Financial Conduct Authority (FCA). The FCA has a very large rule book which firms need to follow, and one of its rules says that all lenders must carry out a credit check on each applicant before agreeing to give them a loan. Hence, the blunt truth is that any company that suggests it can provide no credit check loans is breaking the rules.
Payday loans are quick loans in the sense that you may not have to wait long to receive the funds in your bank account. However, no matter how quickly you need the money, you ought to never be enticed to accelerate the procedure by consenting to a loan where no credit check at is conveyed.
Why a credit check is important
The administrative condition that the FCA directs is essentially intended to ensure clients. The standard expecting loan specialists to complete credit checks is likewise intended to ensure the client. You ought to never take out any loan except if you are sure you can pay it back, however once you have passed a credit check, you ought to ideally have extra consolation. Passing a credit check implies that the bank concurs that there is certifiably not a critical danger of you defaulting on the loan and neglecting to make the required repayments.
The risks of taking a no credit check loan
Taking out a no credit check loan means therefore that no-one has considered whether you are likely to be able to repay the loan. A payday loan is usually for a small amount, such as a few hundred pounds, but if you can’t repay a loan, you could end up in genuine money related trouble. The debt increases the longer it remains outstanding, as do the lender’s fees and charges. Also consider – if you haven’t got the means to repay a payday loan one month, what will have changed for the better in the following month?
Do no credit check payday loans exist? Illegal lenders operating without authorisation
As mentioned before, companies that offer no credit check loans in the UK are breaking the FCA’s rules. On occasions, it may also demonstrate that the organisation is working without FCA authorisation. It is a criminal offence to carry out financial services activity in the UK without authorisation, yet the FCA publishes details on its website almost every day of firms found to be operating illegally.
You can check whether a company is authorised by searching the Financial Services Register – just go to the homepage of the FCA website and follow the prominent link to the Register. If you call the FCA’s dedicated consumer helpline, they will also tell you whether a particular company has been authorised.
In the event that you go over an organisation professing to offer no credit check payday loans, then you may also want to share your experiences with the regulator, the FCA.
If you accept a loan from an illegal lender, you will have no legitimate insurance if things turn out badly. You won’t be able to refer a complaint about the company to the Financial Ombudsman Service, which is an independent complaint adjudication body.