According to Payday Wizard, 2262 County Court Judgements (CCJ’s) were issued every day during 2008. A CCJ is an adverse credit ruling by a County Court with respect to the non-payment of debt. Adverse credit will be registered at all credit reference agencies for a missed or late payment. It can be difficult for those that have missed payments to get a no credit check adverse credit loan, but they are available on less favourable terms.
Types of No Credit Check Adverse Credit Loan
MoneyExpert.com stated that 6.25 million applications have been rejected on all forms of credit during the last 6 months. However, there are still no credit check adverse credit loans available, including pawnbroker loans, payday loans, doorstep loans, logbook loans and homeowner loans. The rate of interest charged on adverse credit loans will reflect the risk posed to the lender.
Credit Union Loans
In order to get a credit union loan it is necessary to be part of a credit union. Credit union loans are offered to members on better terms than Payday loans because they function solely for the interests of their members. Although not an adverse credit loan as such, they are available on more favourable terms. Each £100 borrowed only attracts £2 to £3 of interest per month.
A pawnbroker loan involves the provision of an item of value, such as jewelry, in order to borrow money. Pawnbrokers have been offering adverse credit loans for centuries. The terms are slightly more favourable than Payday loans because of the provision of collateral. According to the National Pawnbrokers Association, approximately 88% of pledged goods are redeemed by their owners.
A Payday loan is available to consumers over the age of 18 who are in full-time employment. No credit check adverse credit loans are available for up to £1,000 for those with short-term financial difficulties. Payday loans are normally taken out for a single calendar month; consumers will typically pay £20 to £25 each month on every £100 borrowed. Credit union loans and pawnbroker loans are preferred.
A logbook loan involves using a fully owned car as collateral. The terms of logbook loans are very similar to Payday loans, although this variety of no credit check adverse credit loan can be for a larger sum and taken out over an extended period. Failing to keep up with the payments will mean that the car is sold-on to cover the debt.
Consumers that need an adverse credit loan should consider a credit union loan first. The terms on pawnbroker loans are less favourable, but the rate of APR is slightly more attractive than Payday loans and logbook loans. No credit check adverse credit loans should only be viewed as a means of short-term borrowing.