Over the last couple of years there are two types of loan that have specifically caught the attention of UK borrowers; both these loans have been ideas imported from the USA and have proved exceptionally popular during the recession. While no loan should be taken without first carefully considering the terms and conditions if you are looking for a no credit check UK loan you may want to consider one of the following.

Payday Loans

Payday loan lending has increased over 241% over the last 4 years in the UK, from £1.6 million in 2006 to £4.1 million in 2010. These loans although originally devised for the US market have caught on very fast and it looks like the trend is destined to continue.

Payday loans are popular for a number of reasons but primarily for their ease of use. Most Payday Lenders carry out no credit checks, do not require their borrowers to fax any details and can provide the loan within 24 hours. Also, the application can be fully completed online without ever having the need to meet someone in person or discuss the loan over the telephone.

Payday loans no credit check charge £25 per £100 borrowed, and many allow you to roll over this amount to the following month with only a payment of interest.

Logbook Loans

These loans are a very different beast to Payday Loans and offer lending on very different terms. As with payday loans they run no credit checks and will provide their services to even those with a very poor credit history. Logbook loans offer lending over a much longer period of time, but insist that they receive a vehicle as collateral. The lenders state that they will lend up to £50,000 but in truth any loan offered will be approximately 50% of your vehicles value.

Remember that no credit check loans will provide loans quicker, but these will usually (in almost all cases) have a much higher APR rate than you would normally expect from the far more conventional bank loan, or conventional secured loan. When taking one of these loans be sure you can afford the repayments and ensure that you are willing to pay this inflated interest. If you are already struggling.

What people need is very bad credit loans which are a type of loan available from various logbook loans companies throughout the UK. If someone with very bad credit applies to one of these companies then they can be given an instant decision as to whether they qualify and they don’t even have to go through a credit check. No credit check loans are unusual but available across the UK in the form of logbook loans where a borrower will put the car against the loan as security so the borrower has less of a risk when lending to them. The basic issue at stake is the likelihood that they will pay back the loan installments or whether they will default on the loan, because for obvious reasons a lender wants to get the principle back plus interest. The function of a loans company is to lend money to people and make a profit through the interest payments – they take a risk up front by giving someone else their own money and trusting them to give it back plus APR interest. Individuals with a very bad credit history have shown in the past that they cannot be trusted to repay loans – this is the meaning of a credit record, and this is what the checks are done on in order to ascertain the trustworthiness of the person.

Some people with very bad credit are in this position due to mistakes made many years ago, or even through no fault of their own, for example the behavior of a spouse with a joint account. The problem with a very bad credit record is that it doesn’t just go away when your circumstances change, like getting a highly paid new job. So someone could potentially be in the position of being in a fairly well paid job but need extra money and cannot get a loan from traditional lenders in the UK, while someone else on a very low paid job but with a clean credit record can get money very easily. Unfortunately there is not a lot these folks can do about it at present other than find a finance company that will agree to lend to people with very bad credit. The flip side of this is that the APR interest rate will likely be a fair bit higher than the APR at your local bank. It needs to be taken into account that the fact that APR is worked out over a year’s repayment time and often logbook loans repayment periods are much shorter than this, for example even as low as a single month. When the monthly figures are put in other terms then the repayments can seem much more reasonable.

In the late nineties two types of bad credit loans were introduced in the US that required no credit checks, these type of loans would later be introduced in the UK.

Payday Loans

Payday cash advances are loans for a period of thirty days or less and usually require no credit checks, however they do require you to be employed and have an active debit card. If you meet the minimum criteria it is likely that you will be offerred guaranteed acceptance. Charges for these type of loans vary but are usually approximately £25 for every £100 borrowed.

Logbook Loans

Logbook loans are the UK’s version of title loans. Although these types of loan require no credit checks they do require you to use your car as security. In most cases your car will have to be under 10 years old and clear or almost clear of finance. Logbook loans are also available over a longer term and can be taken over a period of up to 2 years.