Bad credit payday loans in the UK. How do they work?
Bad credit payday loans are specifically designed to quickly provide small amounts of cash to people who would normally struggle to get such loans because of their poor credit history. These types of loans are designed for unexpected, one-off expenses, and have been created to help people until their payday. Payday loans, also sometimes referred to as a payday advance, are most commonly characterised by a short repayment period, small credit limit and a relatively higher APR. A payday loan for someone with bad credit is specifically designed to help individuals get quick access to the money they need.
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Will my credit score affect my loan?
Lenders use credit scoring to decide who they lend to. A bad credit score often means lenders are less likely to approve payday loans because a direct lender classifies them as a risk in regards to their ability to make the repayments on time. This sounds fairly simple, yet there is no universal credit score or rating. Therefore, lenders will often score you differently using their own criteria, such as whether you’re on the electoral roll, late/failed loan repayments and the extent of your credit history. As such, some people can accidentally find themselves with a bad credit score.
New Horizons understands that people can find themselves with a bad credit score because of many innocent reasons. That is why it is aimed to match you with lenders that offer the best payday loans for people with bad credit in the UK. Understanding that such reasons do not make you an immediate loan risk, and believing that everyone should have equal access to credit when needed, each of the lenders has been specially selected because they specifically offer payday loans for people with bad credit.
Find your best rate loan without needing an initial credit check.*
‘Soft Credit Match’ technology matches your profile to over 50 Financial Conduct Authority (FCA) approved loan companies without leaving any mark on your credit record.
With no obligation & no cost – it’s the best way to find a loan with no credit check.*
Can I check if a bad credit loan is right for me?
While many site lenders often claim to offer payday loans with no credit check, the reality is that The Financial Conduct Authority legally requires all direct lenders to perform mandatory credit checks. As such, this means there is no such thing as a ‘no credit check loan’. Perhaps the biggest concern when it comes to applying for payday loans in the UK is the risk of your application is turned down because of bad credit. Not only does this mean you still do not have the funds you require, but your credit score may also be negatively affected as a result.
Failing a credit check, unfortunately, creates a damaging, negative cycle in which people with bad credit scores are not only turned down for payday loans, but loan lenders will downgrade their credit score even more. One consequence of this is that it can become even more difficult to get a loan in the future.
New Horizons allows you to perform a Soft Credit Match. What this means is that you can search for which lenders are most likely to approve payday loans in the UK without the worry of this check leaving you with bad credit. Not only does this allow you to search more extensively for the right deal for you, but it also enables you to do so without having to worry about your credit score is negatively affected.
Does having a bad credit rating mean I will be automatically declined?
Not at all. If you have a poor credit rating there are lenders, such as banks and building societies, that will not consider lending to you. However, there are a growing number of lenders who specialise in providing bad credit payday loans. New Horizon’s partner has a large panel of lenders who are authorised and regulated by the The Financial Conduct Authority. The lenders they work with offer bad credit loans and help people of all circumstances. Our partner’s lenders can also give you an instant decision on your application.
Am I guaranteed to get a loan at New Horizons?
New Horizons gives you simple, instant access to a huge selection of loans, unfortunately, none of these are guaranteed loans, because that just doesn’t exist. These lenders are selected based on the information you provide us and are those most likely to quickly approve your payday loan. This allows you to select the direct lender for you and be confident in the knowledge that you have a great chance of being approved.
Will I be accepted with no credit check?
There is a short answer to this question, no. Because The Financial Conduct Authority requires all lenders to perform a credit check on your application, even those that mislead you by offering so-called ‘guaranteed loans’, there is no way of knowing for sure whether direct lenders will approve your loan until you actually apply. As such, there is no such thing as guaranteed loans with no credit check. However, this led to an extremely negative cycle in which people with bad credit were often denied loans; making it even more difficult for them to get the loan they need in the future. In an effort to help such people escape this cycle, our system matches you with the direct lenders most likely to approve your loan. Having this information before you apply significantly reduces the chances of your application being denied. Furthermore, this ensures you quickly get the money you require as well as protecting your credit score.
Will the lenders New Horizons work with use Soft Search?
All authorised direct lenders are required by law to perform credit checks on loan applications. Therefore, if you see a company advertising guaranteed payday loans with no credit check they are not being truthful with you. What this means is by applying for a so-called guaranteed loan you could be damaging your credit score without even knowing it. However, this does not mean that these loans are difficult to get if you suffer from bad credit. The good news is that all of the lenders we work with will soft search your application, so your credit score isn’t harmed.
If I have a bad credit score will I need a guarantor?
Many direct lenders now understand that credit scores are often not a true reflection of your ability to repay a payday loan. As such, many certified direct lenders now offer payday loans for people with bad credit in the UK based on information such as your current situation rather than the outdated model of credit score. This new way of assessing loan applications has also changed the need for a guarantor. In the past, it was very difficult to get a loan without having a guarantor. However, many lenders are now aware that having a guarantor is not always possible and therefore you should not be penalised for this. To help such people get equal access to loans, New Horizons can quickly connect you with direct lenders that specialise in providing no guarantor loans.
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