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Payday loans with no credit check
Afraid of what a credit check might say? Look to improve your credit score.
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If you need a loan but are concerned your credit report might hold you back, you may want to look at lenders who offer loans to those with less than perfect credit so you can build your credit score.
Learn more about how payday loans can impact your credit score.
⚠️ Warning: be cautious with short-term loans
If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call the MoneyTalks helpline operated by FinCap on 0800 345 123. It is open from 8:00am to 5pm, Monday to Friday and 10am to 2pm Saturday. When comparing short term loans, ensure you take into consideration any fees, charges and rates you may be charged.
Alternatives to short-term loans
Consider these alternatives before applying for a payday loan:
- Use online Government resources. The Commerce Commission New Zealand website explains how loans works and what to be aware of when borrowing from a lender.
- Payment plans. Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan or receive an extension on your due date if you’re behind on payments.
- Contact your creditors. Speak with creditors about extending the due date of your payment, or working out a new payment plan that works for both of you. Seek personal loans elsewhere. Consider a small personal loan from a bank or a credit union. You may qualify for a loan with much lower interest rates than those offered by payday loan companies.
- Pay with credit card. Consider paying with your credit card to cover your emergency bills or payments. This is not a long term solution, as you’ll need to pay off the balance as soon as possible, but it’s an alternative to a short term loan with high – and immediate – interest rates.
What does a ‘no credit check loan’ mean
- The lender does not request your credit report from a credit bureau. At its most basic level, this is what a no credit check loan is. When you apply, the lender does not request your credit report from a credit bureau to check your borrowing history. New Zealand lenders that follow responsible lending practices will always do a credit check.
- The loan provider checks your bank statements. The lender uses the last three months of your banking history to judge whether you can afford the loan. When it looks at these, the lender can check your income, expenses and if your account has been in the negative during this time (this indicates financial stress).
- You need to earn an income. You need to prove you can afford the loan, by providing evidence of employment or Work and Income payments.
Am I eligible for a payday loan?
Here are some of the criteria you usually have to meet:
- You must be at least 18 years old.
- You must receive a regular income.
- If you’re receiving support from Work and Income, you may need to show you earn at least 50% of your income from an alternative source.
- You are required to provide read-only access to at least 90 days of bank statements. If you would prefer to submit hard copies, this has an impact on the turnaround time.
- Lenders want to know whether you have outstanding loans or other outgoing expenses, such as credit card payments or rent.
Does everyone who has bad credit need a “no credit check” loan?
No. There is a range of lenders that consider borrowers for a loan if you have bad credit, and these providers do check your credit history. Just as the case with no credit check loans, bad credit loans are approved using the information you provide in the application, such as how much you earn and whether or not you are employed. Bad credit lenders may also use your credit history to help make their decision, but bad credit doesn’t mean you won’t receive approval.
If you have bad credit, you may want to compare your no credit check and bad credit options to see which is right for you.
How much does a payday loan cost?
The fees and interest rates associated with a no credit check loan differ from lender to lender, but the cost structure is usually simple. Typically, smaller loans are repaid within a period of two days to one year, while you usually repay more significant loans over a maximum of two years.
How does the application process work?
Bear in mind the application process differs between lenders, but usually, when you apply you are asked for read-only access to bank statements from the last 90 days, details about your job or Work and Income benefits and how much you earn.
If the lender approves the loan, the agreement details the agreed amount, the loan period, associated fees and interest rate p.a. It’s essential to read and understand this contract, especially the information about what happens if you can’t repay the no-credit-check loan.
Applications are submitted online and usually approved quickly. If you meet the criteria and supply all the necessary information, the lender often makes a same-day deposit into your account.
How can I avoid the risks of payday loans?
There are a few risks with payday loans, but you can avoid many of these by doing the following:
- Make sure the lender you are applying with is reputable. Check the lender has a credit licence and is easy to contact.
- Don’t apply for a loan you can’t afford. No matter what financial situation you’re in, it’s not a good idea to apply for a loan you know you can’t repay. If you are in need of financial help, you can contact the New Zealand Federation of Family Budgeting Services on 0508 283 438 for assistance.
- Avoid applying multiple times. Every loan application shows up on your credit file. While these lenders might not consider your credit history, they do lists every request on your file. Several applications within a short period negatively affect your overall credit rating.
- Check what fees the lender charges. Check out the lender’s website for the fees, terms and conditions. You should also check what the loan provider charges if you are late with a payment or default on the loan.
- Consider if you actually need the loan. Once you sign the loan agreement, you’re bound to its conditions until you repay the no credit check loan, including interest and associated fees. Typically these loans are unsecured, which means the lender can initiate legal proceedings against you if you can’t repay.
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