No one likes going through the hassle of having a credit check, often to find that they are either rejected for the loan or the advertised interest rate doesn’t apply to them. Thankfully many loan companies offer guaranteed loans which often don’t involve credit checks.
These loans come in two main forms, short term Pay Day style loans where after a short period such as 30 days the balance of the loan comes due, along with the fee for lending you the money.
The other format is a longer term unsecured loan, where interest is calculated by how long the loan is taken our for rather than as a flat fee. These work better if you need more money or longer to repay.
Many companies specialise in this type of loan, offering money without credit checks but usually having higher interest rates than those that require them. But they are not the only option. Sometimes banks will also provide guaranteed loans to loyal customers as they know they are good for the money.
As with all loans you need to make sure you can afford one before taking it out. To do this find out what the repayments will be, then add these to a list of your monthly outgoings. If this figure is less than your total monthly income then the loan might be affordable, if it’s higher then you really can’t afford the loan and if you really need it will have to find a way of increasing your income to pay for it and avoid a debt cycle.
Don’t worry about your personal circumstances – even if you have unemployed, on incapacity benefit, retired or a student there’s loans available that will accept you. Your housing circumstances, even if your living rent free with your parents, doesn’t matter for most guaranteed loan providers.
Loans can be confusing as different providers have different ways of charging. Some will do things as a flat fee, which makes it easy for you too work out how much you owe. Others will do it as an API interest which can be worked out using a calculator easily. Some do a combination of things, such as brokers fees and interest. Make sure you check if the loan you are being offered is the best deal on the market by working out your total repayments for each offering.
If you are able to get a typical bank loan, although this will require a credit check, usually the interest rate will be lower. Borrowing over a long period of time means this options might be better for you. Similarly a credit card could be a better option than a payday loan if you are able to get one as the fees are typically less if paid back quickly, and they are more flexible in terms of length that the money can be paid back in.
If you have a guaranteed payday loan already and know you are going to struggle to repay it many providers will offer a rollover service. This will increase the amount you pay back and the cost of the loan significantly, so check if doing this is actually cheaper than getting another loan with another provider to repay the first loan. If you find yourself in this situation you should reduce your outgoings or increase your income quickly or the debt might become unmanageable.