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.

When people first start looking for a no credit check loan online they might get feel bombarded by a huge number of websites, lenders and brokers.  Not to mention a large amount of websites that simply look like scams or have a dodgy feel about them.  One of the more specific decisions to be made is to decide between payday loans or a logbook loans.  They appear similar on the surface but there are several crucial differences between the two forms of no credit check loan.

*Use our quick comparison below or visit our home page for full comparison!

	Lender	Debit Card	Loan Amount	Interest	Documents	Apply
3.	Payday UK	Not Required	£80 - £750	£25 per £100	Not Required	PROCEED
2.	Quick Quid	Not Required	£100 - £150	£14.75 per £50	Not Required	PROCEED
4.	Payday Express	Required	£80 - £800	£25 per £100	Not Required	PROCEED
1.	Payday Bank	Not Required	£80 - £750	£25 per £100	Not Required	PROCEED
5.	Purple Payday	Not Required	£100 - £750	£25 per £100	Not Required	PROCEED

This article will first look at the similarities between the two most popular forms of bad credit loans and then go on to list the differences.  Some of these may be obvious to readers who have done some research online, but some things are more subtle and may effect the decision made by the potential borrower.

Similarities between log book loans and payday loans

1. Both types of loan are no credit check loans.
2. Lenders of both types of loan will lend money to borrowers with very bad credit or who have been refused by other lenders in the past
3. Borrowers can make the initial application online for both logbook loans and payday loans.
4. Both have higher APR rates than mainstream lenders which reflects the fact that they lend to lenders with very bad credit who are seen as a bigger risk.
5. Log book loans and payday loans are both often seen as fringe financial products and not part of the mainstream lending industry.  This also includes some people having a bad opinion of the industry as a whole.
6. You need to be aUKcitizen over 18 years old to borrow money.

Differences between logbook loans and payday loans

1. With a logbook loan your loan is secured on your vehicle.  This means that you may lose your car if you fail to repay the loan.  However the borrower keeps full use of the car during the loan period.  With payday loans the lender makes sure that the borrower can repay the loan i.e. has an income and then issues unsecured loans rather than secured loans like logbook lenders.
2. You can borrow larger amounts of money with logbook loans than payday loans.  This is because they are car secured loan, meaning that a borrower can take as much money as he or she wants as long as the value of their vehicle covers the loan amount.  Lenders often lend half the market of value of the vehicle.  Payday loans tend to be loans of less than a £1,000, whereas logbook loans may go as high as £50,000 if an expensive vehicle is used as collateral.
3. Logbook loans have a lower APR than payday loans.  This is because they are car secured loans, but also because the loan period is usually much longer.  Whereas a payday loan is taken out for a month at a time – until payday – a logbook loan might have an 18 month repayment period.
4. There are far more payday loans lenders available to choose from than logbook loans lenders in the UK at this time.

The leading payday loans lender ‘Instant Loans Direct’ have said that following a review of over, 75,000 of their customers around 57% of their customers earn between £25,000 and £50,000 per year with 75% of all customers being between the ages of 25 and 45.

These statistics are sure to strike a cord with consumer action groups who have been calling for the banning of such lending practices, but in a time when banks are not lending it appears that bad credit borrowing is the only option for many.

Giles Coutts of Instant Loans Direct says: ‘Many assume it’s only those on low incomes struggling to get cash from their bank and who resort to payday loans.

‘But it’s actually the middle-earners whose budgets are being bust and who need the cash most desperately to cover them, usually for ten days until payday.’

James Falla, personal debt consultant at beatmydebt.com was fast to warn those struggling with their debt not to be tempted by payday loan companies, but instead seek advice on dealing with their debt.

“More and more we are seeing people who are already with significant personal debts turning to payday and doorstep loans to make ends meet. But borrowing more in these circumstances is simply not the answer and will make things worse” he said.

“It is far better to consider a sensible debt management solution such as a debt management plan or individual voluntary arrnagement which does not involve borrowing more” Falla advised.

Despite these shocking statistics it appears that the Payday Loan companies themselves are applying their own brakes to their lending policies – perhaps knowing that an even bigger recession is not a complete impossibility. These companies now appear to decline over 90% of their applications, so it appears at least for the time being that many have nowhere to turn for cash to get them to their next payday at all.

The industry has been in the news a lot recently as some members of parliament, as well as some pressure groups, have been campaigning for greater regulation in the industry to curb things like excessive APR interest rates and repayment amounts. These groups feel that payday loans lenders take advantage of people in need of cash loans and charge them exorbitant APR interest rates because they know that they have no other options for borrowing fast money. There are not many loans for people with bad credit available in the UK so these companies are accused of using this to their advantage and charging ridiculous fees because they know they can get away with it.

However, a lot of the complaints are based on a misperception of the APR interest rate that these payday loans companies charge. APR is calculated over a year’s payment period (by definition: A = annual) But the main point about payday loans is that they are to be paid back after ONE month I.e. at the borrower’s next payday. When the APR is calculated it skews the number and makes it appear far, far higher than it really is if you were to pay back the loan after one month. This is of course a problem with statistics in general and not just this industry but by law they need to advertise their financial products with APR fully shown and explained to customers prior to purchase.

In the UK there are various lenders providing payday loans for people with bad credit, and they are becoming more popular every day. Most of these lenders will have no credit check done on the borrower as part of the application procedure. The reason for this is probably due to the fact that the loans are for small amounts at a time and they qualify borrowers first by making them prove that they have a regular income and can therefore make the repayments. They are also unsecured loans so people do not have to risk losing an asset if they cannot repay the money for whatever reason.

One type of loan that is reasonable and offers quick relief in times of serious need is a payday loan, also called a cash advance loan. Cash advance loans are a breath of fresh air amongst the lending world, and they are exactly what they sound like. They provide you with an amount of money that is equal or similar to your pay check amount, and you repay the lender when you receive your next pay check or shortly after your get it. The loan period is very short, usually no more than thirty days. They are fast, private, and you do not need amazing credit to be approved. All you need is proof of your regular income, documentation that shows you reside in the UK, and a valid debit account which will be used to deposit your money.

After you find out about the pros and cons of a payday loan, you may want to know which steps you need to take in order to get one. In general, there are five easy steps to securing a cash advance loan and successfully closing the account out once you have spent the money. First, find a reputable lender. There are many companies that specialize in payday loans which have store locations you can physically go to. One of the more popular options is a secure, on-line lender. On-line lenders are the quickest way to get your money because you can apply directly on-line, receive an instant decision, and have your money transferred right away.

Once you have found your lender, you will have to go through a simple application process. You will have to provide proof of your income, residency, and bank account. Next, you will receive your money. Wait until the funds clear in your account, then take the next step- spend it! Use the cash for whatever it is you need. Whether you pay off a medical bill, need to get your heater fixed, or need to make a late payment, the funds are readily available and can be used immediately.

Finally, once you pay for what you need, it is time to repay the amount you borrowed. Although it sounds obvious, many borrowers fail to repay their loan on time or they get behind on the payments and end up racking up unnecessary interest and extra finance charges. As soon as you have the money available to pay the loan back, pay it right away in order to clear your record and to officially close out the loan account. Following these five simple steps will help you make your way through the payday loan process quickly and with ease.

Large Enough Monetary Amount to Suit Your Specific Needs

First, you want to ensure that the UK loan amount is large enough to meet your specific payday loan needs. Since individuals obtain payday loans most of the time in order to meet a specific purpose, you want to make sure that you are able to borrow all that you need in order to meet your needs. Therefore, before borrowing money from a UK payday loan company or an online payday loan company which caters to UK residents, make sure that the money will suit the purpose.

Low Fees on the Loan

When acquiring a payday loan you should always expect to pay certain cash advance fees. With that said, when obtaining a UK payday loan you should not pay a fortune on the cash advance. Make sure that any and all of the fees which you might have to pay on the payday loan are low in amount. Do not pay exorbitant amounts of money with regard to UK payday loan fees as there are companies which will offer lower ones.

Favorable Repayment Terms

Most UK payday loans are due to be repaid within a few weeks or by your next payday, hence the name payday loan. When reviewing the loan terms, make sure that all of the repayment terms are favorable in nature. This relates to when the payday loan repayment is due and what fees are charged along with the repayment of the loan.

Reputable Payday Loan Company

When borrowing money through a UK payday loan, always try to use a reputable company in which to borrow the money from as this is an important feature. Reputable payday loan companies will charge reasonable amounts in fees, offer repayment terms which one can meet and be recommended by others. Efficiency and friendly customer service representatives may also make a payday loan company more reputable overall.

No Credit Check Required

Lastly, when borrowing money through a UK payday loan, make sure that no credit check is required. The whole purpose behind a payday loan is to obtain money quickly without the hassle of traditional loans. A credit check takes a while and let’s face it, not everybody will have favorable credit. You want to deal with a company which gets you in and out with cash in hand in a quick fashion and no hassle. Therefore, do not deal with UK payday loan companies which make you fill out credit paperwork in order to do a credit check on you as this is completely unnecessary for a payday loan situation.