The Alternatives To No Credit Check Loans
Are you considering a no credit check loan? It can be an excellent option for someone whose credit rating is not very good, or even someone who is very private and doesn't feel great about allowing a stranger to check into their financial history. But while this is an option worth considering, you also need to know what to look out for with no credit check loans. There are also alternatives you might want to check, before committing. You never know, something better might pop up and it might be right up your street. So, let's look into no credit check loans and any suitable alternatives that may seem attractive.
What Would I Get A No Credit Check Loan For?
You may be wondering what's in it for you; that is to say, why would you get a no credit check loan? What could you be possibly be angling for, or what would you do with one? Let's answer both those questions, as they're important things to consider:
Why do people get them?
First, let's address the advantages that no credit check loans bring and why you would choose them over other alternatives. Is the lack of credit check that appealing?
- They have bad credit - A poor credit score can hinder you when it comes to borrowing, as it can attract high interest rates, while limiting the amount you can borrow and the repayment term. A lack of credit check can circumvent these issues.
- They are private - Not everyone fancies letting someone else have a nosy through their personal financial history or knowing that much about them. In that case, skipping the credit check can offer one peace of mind while still allowing them to borrow money.
- They want to improve their score - The easiest way to improve your credit score, besides paying off debt, is to get a loan that you know you can responsibly repay on time and consistently. That will demonstrate financial responsibility, but it can be hard to get one with bad credit, so a no credit check loan is ideal.
What can you do with them?
Ok, but what can you do with the money? You can generally expect around £1000, to be repaid within a few months, so while it's not an amount to ignore, it is rather limiting in terms of options. Or is it? Here is what you can put that money towards:
- Car repairs
- Previous debt
- Personal expenses
- Medical emergencies
- Household repairs
Are There Better Alternatives?
But what if no credit check loans are not your cup of tea at all, and you're looking for something else that is similar and can possibly offer the same kind of benefits? Are there better alternatives? Let's consider some options:
If what you're looking for is an amount around that offered by no credit check loans (so let's say, around £1000), then a credit card may suit you better than a loan. This option is especially advantageous if you need the money on a regular basis, and not just as a one-time thing. The catch with this one, however, is that it is reliant on your credit score, which means the bank will absolutely look into your financial history and perform a credit check, as well as an affordability check and all the other extras.
Unless your family member is an authorised lender, they will be able to offer you payday loans with no credit checks! Obviously, borrowing money from friends and family is always an option, and the advantage is that you will be less scrutinised and are less likely to be rejected, at least not based on your score. In addition, you can negotiate zero interest and a generous repayment term. However, mixing family and finances can sour relationships very easily, so you have to ask yourself if you are willing to risk the connection you have with your loved ones.
Assuming what you are interested in is an option that is less reliant on a credit score you are not very proud of, perhaps you would be interested in secured loans, instead. The advantages of secured loans are that they offer larger amounts of money (depending on the value of your asset) and that they are secured by an asset and not by your credit score. If you own a car or a house, you can use it as collateral in order to borrow quite a bit of money. Of course, if you're only after a small sum, it may not be worth potentially jeopardising your asset for a petty sum. According to UK Finance, gross mortgage lending was at £21.4 billion at the end of last year, so you might want to think twice before going into that kind of major debt.
Bad Credit Loans
Who says you can't borrow money with bad credit? That's exactly what bad credit loans are for! While a credit check will still be performed, poor ratings will not be denied right off the bat, but instead considered, along with all other scores. There are lenders that specialise in extending credit to individuals with poor ratings, so you can definitely find an option, if you are interested in exploring this alternative instead of loans with no credit checks.
All in all, a payday loan with no credit check is one of the most attractive lending options out there, as it spares the borrower of an assessment step that can compromise their ability to borrow money. However, no loan option is without faults, so you might be tempted to look for a better choice. There are alternatives available, each with their own PROs and CONs, but all worth considering. You just have to review them carefully and decide which one is the best fit for your financial situation, as well as your needs and expectations.