Households in the UK have been repeatedly warned by traditional lenders to not deal with instant cash loan providers, but with the economy in its current state, the only way for many to get emergency funds is through no credit check loans.
Originating in the US, short term loans for bad credit have made their way to the UK recently as a result of the dire situation many Brits have found themselves in in the wake of the credit crunch and global economic downturn. With so many households in the UK struggling with higher costs of living in the face of jobs losses or cuts in wages, being able to go to a traditional lender for finance is nearly impossible because of credit checks – but instant cash loan companies do not need to run credit checks before offering funds to an applicant.
Payday loan providers also differ in another important way from traditional lenders that many borrowers never have to present themselves in person. No credit check loans were formulated with ease of use and convenience in mind, so nearly every provider will offer their services online over the internet – and some have even gone so far as to allow you to apply for funds via SMS text message sent from your mobile phone.
However, there is a price for all this convenience, though it’s not nearly as terrible as many traditional lenders will let on. Because there is no credit check on these loans, the interest rates are quite high – but instant cash loan repayment terms are designed to be paid back within around 30 days, which means that a high APR actually translates to about the same amount of fees you would pay through the use of an unauthorised overdraft.