You must have come across some lenders providing no refusal payday loans. You will probably be looking for a loan with guaranteed approval or a higher probability of acceptance because of being refused elsewhere. No refusal payday loans in the UK from direct lenders do not exist at all. No FCA-licensed direct lenders are in a position to approve a loan application without running a credit check.
A credit check is a must in order to ensure that you do not borrow more money than you can afford. Your credit score is an acknowledgement of your financial comportment. If your score is up to scratch, it shows that you managed to meet your obligations on time. While some lenders claim to make lending decisions based on your income sources, it is likely that you will fail to meet your obligation despite earning well.
Lenders providing these loans could be loan sharks
While no registered lender can sign off on payday loans with 100% guarantee, there are some loans that operate lending businesses without any registration or license. Such lenders target subprime borrowers and those who are refused elsewhere. They take advantage of your poor credibility in order to charge exorbitant interest rates to make money.
These lenders do not bother to run a credit check. As a result, they cannot know how much debt you actually owe. It is likely that you are already up to your neck in debt. When you already owe too much debt, no lender can lend you more money, but an unregistered lender will do the reverse against all odds. This gives them an opportunity to charge exorbitant interest rates.
Such lenders are loan sharks. They will never protect your interests when it comes to lending money. If you fall behind on the payment, they will start chasing you. They will even use illegal methods to get their money back.
- If you borrow money from a loan shark, you will end up ruining your credit score.
- A poor credit report will remove all probabilities of borrowing money at lower interest rates down the line.
- You will end up falling into an abyss of debt.
If you have come across a lender providing no refusal payday loans, you should avoid them. Bear in mind that you cannot make affordability complaints against a lender because it was your fault that you preferred them to registered lenders.
There is always a scope of refusal
You cannot exterminate the possibilities of being refused just because your lender claims to provide no refusal loans. While such lenders do not run a credit check, they will certainly review your income sources. Upon finding your repayment incapacity, they will most likely repudiate your application.
For instance, if your monthly income from all sources is £350, your monthly expenditure is £200, and you decide to borrow £100 at £15 interest, of course, it will be impossible to keep up with the payment. Your lender will hardly approve your application.
However much your lender says your application will be 100% approved, there is always the slightest likelihood of rejection. There are certain criteria you need to meet in order to get approval.
Some boast high acceptance and approval ratings
Some lenders use this term in order to attract more applicants. With the term, they mean to say that the approval and acceptance rates are high, but it never suggests that there is no chance of rejection. Lenders claim to provide no refusal payday loans in order to obtain as many applications from subprime borrowers as possible. When a large number of applicants fill in the application form, they tend to give the nod to many as long as borrowers prove their repayment capacity.
The approval rate is high when your credit score is not abysmal. For instance, if your credit rating is very poor, you will certainly be denied. Your score must not be lower than the bare minimum rating your lender accepts, even though it is subprime. This will improve your chances of being selected.
Some lenders run only soft credit checks
You might be wondering whether it is possible to get approval from a lender without a credit check. Most of the borrowers hesitate to have their credit report checked at the time of borrowing, especially when their credit rating is not stellar. This is because hard credit inquiries are recorded on your credit report, and they pull your credit points. The impact of hard inquiries will remain for up to two years.
There are mainly two types of credit inquiries – hard and soft. If a lender runs hard inquiries, you will certainly lose your credit points. There are some lenders who run soft credit checks.
Soft credit checks will not pull your credit points. They do not record soft inquiries on your credit report, so if you are looking to consider borrowing money without a credit check, you should consider borrowing money from a direct lender that runs soft inquiries.
Such lenders are not loan sharks. Registered lenders are also permitted to run soft checks, especially when the borrowing amount is exiguous. They will carefully examine your repayment capacity as well.
Only if you prove your repayment ability will your lender approve your application. Just because they run soft inquiries, it does not mean that they will sign off on your application with a CCJ. Make sure that your credit score is not lower than the minimum score they have set for approval.
The final word
No refusal payday loans do not exist at all. If any lender claims to provide these loans, they could be loan sharks. You should beware of them. However, some lenders mean a high acceptance rate.
If you are looking to borrow money without losing your credit points, you should consider contacting a lender who runs soft checks. They will not affect your credit score, but you should still have a decent credit score. People with a CCJ might not be accepted. Having a greater income improves your chances of being accepted, too.
