We all need to borrow money time and again to meet certain financial requirements. Sometimes we can get help from our family while at other times we need to rely on other sources such as major financial institutions and other credit lenders.
When the amount you need to borrow is large and needs to meet greater goals such as starting a business venture or buying a house; you need a loan for a longer term and you might also need to mortgage your belongings. On the other hand, when your requirement of a loan amount is just to meet the immediate expenses, a payday loan is sufficient.
You do not need to submit collateral documents or undergo stringent credit checks for availing payday loans. If you are an adult UK citizen, then you can get an easy and almost instant payday loan at Loanpig. They are FCA regulated direct lenders and you could be assured best competitive interest rates.
Credit check for payday loans
It is a general rule to check the credit history of a person before his/her loan application is processed and sanctioned. This is a mandatory protocol followed by every financial institution for almost all forms of loan. However, it is not completely the case when you apply for a payday loan as they are sanctioned almost instantly.
There are companies that claim that they provide payday loans on a “no credit check” basis and you must keep yourself away from such lenders. This is because some form of credit check is mandatory, if the financial set up is FCA recognized.
Credit check carries its own advantages for both the lender and the borrower and some of the benefits are as follows:
- A credit check assesses your past financial history such as any outstanding credits, history of bankruptcy, overdrawn, or any illegal financial activities.
- This gives the lender a general idea about your repayment capacity.
- It also assures you at the same time that you have greater chances of repaying the loan amount within the time frame.
- By doing this you will not be marked as a defaulter and you will also prevent yourself from entering into a loan trap which can make you bankrupt.
- Thus, a credit check gives you and your lender both the credibility of your repayment capacity.
- With no credit check; your repayment capacity is not known and you can find yourself in even greater difficulties if the chances of outstanding payments are high.
Therefore, no credit check loan is illegal and unregulated in the UK. Though, the process is much simpler for payday loans; it cannot be completely avoided. If you borrow a loan from illegal lenders that ploy you under the name of credit checks; there is no way in which you can get help from authorities or file complaints if things turn out the wrong way.
Credit check does not just benefit the lender but also ensures that you do not add on to your debt and end up in a worse financial scenario than before. Thus, you must ensure that the lender from which you are seeking financial aid is authorized and regulated to provide the same, even if the process is a bit lengthier.