A no credit check loan might be a loan type that many people have no really heard of. This is because they are not loans which are offered by traditional lenders. If you have never used one before then you may not know very much about them or in fact you may not have even heard of them before.
What does no credit check mean?
The names of ‘no credit check’ loans can be rather confusing. This is because it is necessary to do a credit check on all lending. However, there are different types of credit check and this is where the difference lies. Most lenders will do what is known as a hard credit check. They will look at your credit record and leave a record on it that they have done. If they are checking you out for a loan and then agree to lending you money, then this is not a problem. However, if they look at your credit report and decide not to lend to you, then this leaves a record on the credit report that you have been turned down for finance. This can mean that when other lenders look at it, they might decide not to lend to you just because another lender has decided not to as they may feel that indicates that you are a risk.
However, a no credit check lender does a different type of credit check. They will not look at your credit record in the same way. They have to look at it, but they are not interested in looking at how risky you are. They also will not leave a record behind, so no one will be able to see that they have looked. Therefore, there is no risk of this check scaring off any future lenders.
How much can be borrowed?
As no credit check lenders are taking a high risk then they will not lend that much money. They might tend to only lend a few hundred pounds to first time borrowers and if that is repaid on time they may lend more. Normally you would not be able to borrow more than a thousand pounds. This is good though because it will mean that there is less chance of the borrower getting into financial difficulties which is something that it is possible that they have done before which is why they have a poor credit record.
How quickly can I get the money?
It is worth knowing that a no credit check loan can often be organised really quickly. This means that you should be able to get the money that you need really fast. It can be possible to get it within a few hours, so that means that you will be able to use it for an emergency. Sometimes more standard loans take a lot longer than this and therefore you might want to use a no credit check loan, even if you do have a good credit record. It is wise to check with the lender before you sign up though as some may take longer than others. It is possible that some may take a few days and some a few hours, so you will need to check, especially if you need the money really quickly.
How is the loan repaid?
It is always a good idea to find out how you need to repay a loan so that you can be well prepared. Often with a no credit check loan you will be expected to repay the whole loan in one go and it is good to check if this is the case. Some will be paid in instalments though and this could be easier, especially if you are borrowing a larger sum of money. To find out about how you will repay you should be able to look on the lenders website or contact them to check.
Just finding out how much you will have to repay and when is just the start though. If you are thinking of getting this sort of loan, you need to then check whether this will be an amount that you will be able to afford. Check out your personal finances and see how much you normally have available and whether you will be able to afford this.
Who are the loans for?
Many people think that certain loans are just for certain people. This is the case with mortgages, which are only for home buyers and student loans which are only for students. However, just because these loans were designed for those people that cannot get other loans, it does not mean it is restricted to just them. They are available to anyone who wants one. This means that if you need money quickly or a small amount then they can be really suitable for you.