If you approach any lender or broker authorised and regulated by the Financial Conduct Authority (FCA), they will tell you that there is absolutely no such thing as a guaranteed payday loan. Guaranteed payday loans are not regulated by the FCA.
And that’s a good thing, even if you’re concerned that what’s on your credit file will mean that you’re declined for a payday loan. The FCA rules mean that all lenders must carry out a full credit check on every borrower when they make a full application for a payday loan.
It’s all to do with responsible lending – no-one wants to lend money to a borrower who can’t afford to pay the loan back. Nobody wins. A borrower’s credit score will dramatically decrease if they default on a loan meaning that access to credit is likely to be shut off to them for years to come. And the lender loses money they didn’t need to lose if they had only checked that you could afford the loan in the first place.
Before you get too concerned, it’s important to know that responsible lending is more than just what’s on your credit report. For payday loan companies which specialise in providing finance to people with bad credit, they also take into account your financial situation today when they make a decision on whether to approve your application.
Guaranteed payday loans – the truth
- Am I guaranteed to be accepted for a payday loan?
- Will I be accepted with no credit check?
- Do lenders use soft searches?
- If I have a bad credit score will I need a guarantor?
Am I guaranteed to be accepted for a payday loan?
No lender or broker can guarantee that you’ll be accepted for a payday loan before you make your application.
What’s on your credit report is still very important to lenders who specialise in bad credit loans - but so is how affordable the repayment or repayments would be for you.
Lenders are all different. Each lender specialises in a particular type of payday loan made to particular types of borrowers. They really only want to offer loans which tick both boxes.
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Will I be accepted with no credit check?
Payday loans with no credit check are not authorised by the FCA. What this means for you is that you can’t actually apply for a no credit check payday loan because FCA-authorised and regulated lenders aren’t allowed to offer them.
Do payday lenders use soft searches?
Many lenders use soft searches to give you an indication on whether you might be approved for a loan through them or not.
Soft searches are only visible to you on your credit report. Other lenders can’t see that they’ve been run and it doesn’t affect your credit score in any way.
If I have a bad credit score will I need a guarantor?
Just because you have a bad credit score does not mean that you’ll need a guarantor. However, if you have very poor credit, you may be more likely to be able to borrow money from a guarantor loan - although we can’t guarantee this.
At Growing Power, we work with a number of guarantor loan companies – please click here for more information.
Apply through Growing Power
Growing Power works with lenders offering loans of between £100 and £10,000 over a period of between three months and five years.
When you apply for a loan through Growing Power, we’ll contact the lenders on our panel on your behalf likely to be able to offer you a loan based upon the information you’ve provided. We work with over 40 trusted and established FCA-authorised and regulated lenders. When we start working with a lender, they tell us about the borrowers they tend to prefer and the types of loan (amount, purpose, length of loan, etc) they like to make.
When we receive the details on your application form, our computer system examines what you’ve told us and then it matches you up to the lender most likely to want to help you based upon the information the lenders have given us.
Within just a few seconds, we present your details to our panel of lenders and each one will get back to us letting us know if they’re interested in lending you money or not. It’s important for you to know that each of the lenders we approach only uses soft searches at this stage of the process.
At this point what happens is that we’ll direct you to the website of the lender on our panel likely (although not guaranteed) to offer you a competitive and affordable loan.
They’ll ask you a few more questions. Once you’ve answered them, the lender will then run a full credit search on you. No credit check loans are not regulated by the FCA. Growing Power and our panel of lenders are all FCA-authorised and regulated meaning we don’t offer a service to help borrowers find no credit check loans.
Within a few seconds, you’ll either receive a firm offer of a bad credit loan or the lender will inform you that they’re not able to proceed any further with your application.
Please remember that your lender is used to working with people whose credit histories are not perfect. If they find adverse information on your file, this does not mean that they will not consider you at all.
For bad credit loan companies, choosing who they lend money to is about more than just what they find on your credit file, important as that is though.
Please don’t apply for a bad credit loan unless you need the money to cover an emergency and you are unable to obtain the money from another source at better rates. Debt is a growing concern for many in the UK and, if you are in debt and you want help to manage it better, you may benefit from contacting one of the country’s leading debt charities - StepChange, PayPlan, National Debtline, the Debt Advice Foundation, the Money Advice Service, and Citizens Advice.
To apply for a loan through Growing Power, please click here.