What is a no credit check loan?
In theory, a no credit check loan is a loan which is approved without the lender first looking into your credit history.
In reality, however, a no credit check loan is not a legal loan product.
Any lender that is regulated and authorised by the Financial Conduct Authority (FCA) MUST carry out a creditworthiness assessment as part of your full loan application. At CashLady, we only work with lenders who are fully FCA authorised and regulated.
It's completely understandable why some people may be reluctant to undergo a credit check. If you have poor credit history or have made some financial mistakes in the past, then you may be concerned that a credit check will result in your loan application being declined and your credit score being damaged further. However, opting to apply for a loan with a lender who isn’t following FCA guidelines could put you at serious risk.
If you’re concerned about your credit score, please know that there are FCA authorised and regulated lenders, including several on the CashLady panel, who are willing to consider applications from people with bad credit. We’ll talk about this in more detail further down the page.
Can I get a payday loan without a credit check?
You cannot get any type of loan, payday or otherwise, without undergoing a credit check.
Different types of checks carried out by credit brokers and lenders
- Soft credit search
Also referred to as an ‘affordability check’ or an ‘eligibility check’, a soft search is a way for a credit broker or lender to gain an overview of your financial information without leaving a mark on your credit file or affecting your credit score. A soft search could help you understand your chances of being approved for a loan before you make a full application. - Creditworthiness assessment
In line with FCA guidelines, anybody who applies for a loan must undergo a creditworthiness assessment. This will include either a hard search or Open Banking.
A hard search provides a more in-depth insight into your credit history and will be visible on your credit file for up to 12 months. Multiple hard searches within a short period of time will damage your credit score.
Open Banking is a safe and secure procedure carried out by an authorised and regulated third-party. With your consent, Open Banking allows your chosen lender to access your online bank account and view your recent transactions. This gives lenders a more up-to-date understanding of your financial situation and habits, rather than relying on your credit history alone.
Why is a credit check important?
A creditworthiness assessment is carried out to ensure that you are able to afford the loan you have applied for. Taking out a loan that you cannot afford could put you at risk of serious financial problems, including debt. Defaulting on a loan repayment will harm your credit score, and you may be charged added fees by your lender.
While you might feel apprehensive about undergoing a creditworthiness assessment, it’s vital to remember that these checks are in place to protect you.
Are no credit check payday loans safe?
Sharing your personal and financial information with a company who claims to offer ‘no credit check’ or ‘guaranteed’ loans is a risk.
No lender should offer you a loan without completing a creditworthiness assessment first. Doing so would be breaching FCA rules. If a company is prepared to approve your application for a loan without conducting a creditworthiness assessment, it suggests that they are not authorised or regulated by the FCA and is therefore operating illegally.
If you were to take out a loan with an unauthorised and unregulated company, then you would have no legal protection if things were to go wrong. You would also be unable to refer any complaint about that company to the Financial Ombudsman Service (FOS).
You should always check that the company you’re thinking of applying with is authorised and regulated by the FCA. You can check if a company on the FCA register here.
Alternatives to no credit check payday loans
Important: remember, you should avoid any company claiming to offer loans without a credit check.
- Save up
If it’s not urgent, you may wish to save up the money yourself, rather than borrowing credit. - Borrow the money from a friend or family member
A loved one might agree to provide you the money at a lower rate of interest than a mainstream lender. If you agree to borrow from friends or family, a robust repayment plan will need to be put in place to protect your relationship. - A guarantor loan
If you have poor credit history, a guarantor loan could be something that you may wish to do some research into. A guarantor loan is when somebody you know well agrees to apply for the loan with you. While you will be primarily responsible for making your repayments, the guarantor will step in and cover the cost if you suddenly find yourself unable to. - A short-term loan
A short-term loan enables you to spread the cost of borrowing over several months or years.
What’s the difference between a payday loan and a short-term loan?
With a payday loan, you’ll typically be required to repay the full amount, plus interest, within a month. A short-term loan comes with a range of repayment terms, which could help you spread the cost of borrowing and make it more affordable for you.
Worried that your credit score will affect your chances of being considered for a loan? CashLady could help
CashLady is a credit broker, and several of the lenders on our panel specialise in loans for people with bad credit. While we don’t work with any payday loan providers, the lenders we work with offer short-term loans with repayment terms between 3 and 60 months.
Will searching for a loan with CashLady affect my credit score?
No. CashLady uses soft search technology with no impact to your credit score. However, if our search reveals that you’ve been matched with a loan and you choose to make a full application, the direct lender will complete a creditworthiness assessment. As discussed, this could involve a hard search. A hard search will be visible on your credit file for up to 12 months, and multiple hard searches across a short period of time will cause your credit score to decline.
Who can search for a loan with CashLady?
You can search for a loan with CashLady if you:
- Are over the age of 18;
- Are a UK resident;
- Have a UK bank account with a valid debit card; and
- Have a regular source of income paid into your bank account.
Five reasons to choose CashLady as your no credit check payday loan alternative
1. CashLady, and all the responsible lenders on our panel, are authorised and regulated by the FCA.
2. Our straightforward online form takes just five minutes to complete.
3. We don’t charge any fees for our service.
4. We pride ourselves on our customer service. If you have any questions, our team are available from Monday to Friday, between 9am and 5pm.
5. Quotes are no-obligation.
How much money could I apply to borrow?
The lenders on the CashLady panel offer loans from £100 to £10,000. You should never borrow more money than you need or can afford to repay.
What can a loan be used for?
Customers usually apply for a short-term loan to cover the cost of an unexpected expense, such as urgent car repairs or an unplanned bill.
Before you apply for a loan, you should carefully consider whether this is the right option for you.
What happens if I take out a loan and can’t afford the repayments?
Before you sign a credit agreement, it’s crucial to ensure that you’re able to afford to make your repayments in full and on time each month.
If your financial circumstances change during the course of your loan term and you fall into difficulty when making your repayments, you should contact your lender. They will be able to talk you through any options that could be available to temporarily help alleviate some of the pressure.
Free money and debt advice
If you’re worried about anything money or debt related, please know that you can seek advice from any of the following charities and organisations: StepChange, MoneyHelper, Citizens Advice, and National Debtline.
