The whole concept of lending can be really confusing and often there are stories in the news or other media which can add to that confusing. We may have heard that you can get loans with a poor credit record then that all lenders have to do credit checks and you may just wonder whether there are actually no credit loans in existence any more. It is worth getting to know exactly what is going on currently with loans and particularly no credit loans so that you are aware of what your options are.
What are no credit check loans?
You may have seen that there are some loans which advertise themselves as no credit check loans, but there are laws in place that credit checks have to be done. It can be extremely confusing. A loan which says it does no credit check will tend not to turn down many applicants based on their credit rating. A credit check just gives the lender an impression of your financial situation. The lenders then can choose who they decide to lend to and who they don’t. Large financial institutions will tend to be quite strict and only lend to those that they feel will be guaranteed to repay their loans and therefore they will turn down those that do not have a good credit record. Other lenders will not have such high standards and will be happy to lend to most people as long as they have an income so have a capability of being able to repay. A no credit check loan will tend to fit into this category of loan.
Do no credit check loans exist?
Therefore, it is not really the case that there are no credit check loans, but there are loans where your credit rating is not that important to the lender. This could be seen as the same thing and it does mean that you do not need to despair if your credit rating is not good. There will be something that you can do as there are loans available that could provide you with what you need.
Are there borrowing options for those with a poor credit record
This means that if you do have a poor credit rating then there will be some borrowing options available to you. These will often be short-term loans where you will borrow a fairly small amount fo money. This makes sense as the lender will want to make sure that the loan is an amount that you can cope with. If you have not had loans before or have struggled with repayments then this will have a negative impact on your credit score. They will therefore want to make sure that you are not going t be overwhelmed by the loan that they give you. Therefore, it will tend to be for a smaller amount of money that they will hope you will be able to manage well. You may find that once you have used a lender once, they will be prepared to lend you more money. This will generally only be the case if you repay the loan as agreed and they will then be able to trust that you will be able to do that again in the future.
With all loans it is wise to be careful. You will need to be sure that you will be able to cover the repayments or else you could end up having to repay a lot more or even go to court. Therefore, taking on a smaller loan like this, can be better as it will be easier for you to manage and there is a much lower chance that you will get into difficulties. If you have never borrowed before then you will not know how easy you will find it to manage loan repayments until you try. If you have struggled in the past then you will appreciate the possible problems and will know that if you borrow less it will be easier for you.
It is worth therefore, making sure that you carefully calculate how much will be the right amount for you to borrow. Think about not only how much money you think you need, but also how much you can afford to repay. You need to make sure that you will definitely be able to make that repayment in full and that is the most important thing that you should be focusing on. You will also need to make sure that you will be able to pay for everything else that you need to buy as well. So, get some bank statements together and calculate what you have to pay for and how much money you have coming in and make sure that you can afford it. If not, then it could be possible to cut back spending or earn more money but you will need to come up with a plan before you take out the loan.