Payday loans are expensive forms of credit and shouldn’t be used to fix long-term financial issues. People should avoid payday loans if it will put their budget under strain, as late fees for payday loans can build up quickly and result in debt.
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Payday loan with no credit check
Find out how to compare lenders that won't check your credit report.
If you need a loan but are concerned your credit file will hold you back, you have the option to apply for a payday loan with no credit check. Lenders of such products base their decision on your income, employment and bank statements rather than your credit history. If your application is successful, you could access funds in a very short period of time.
Find out about how a payday loan with no credit check works.
What does “no credit check” mean?
- The lender will 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 will not request your credit report from a credit bureau to check your borrowing history.
- The lender will list the loan details on your credit file. While the lender does not check your credit report, it will tell the credit bureau you applied for a loan. If you are approved, the provider will also list the loan on your credit report.
- The loan provider will check your bank statements. The lender uses the last few months of your banking history to judge whether you can afford the loan. When it looks at these, they can check your income, expenses and if your account has been in arrears during this time (this is an indicator of financial stress).
- You need to earn an income. You need to prove you can afford the loan, by providing evidence of employment or any other ingoing payments.
Compare payday loan options in South Africa
Why don't short term lenders check your credit history?
Instead of judging you on your financial past, these lenders focus on what you can afford now and whether you can repay the loan amount. To do this, they ask for proof of employment and income. If you’re unemployed, you may still be eligible, but you need to be able to demonstrate income from another source, eg shares. You also need to provide three months’ of your bank statements.
Either way, lending money without a credit check represents a high risk. While a lender can approve a loan within minutes, they come with higher interest rates and fees than those of traditional lenders.
Remember it’s important to compare your options and other financial avenues before applying.
Am I eligible for a no credit check 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.
- You may need to show you earn at least 50% of your income from an alternative source.
- You might be required to provide read-only access to at least 90 days of bank statements. If you would prefer to submit hard copies, this will have an impact on the turnaround time.
- Lenders may 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?
Simply put, no. There is a range of lenders that will consider you for a loan if you have bad credit, and they will 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 they won’t approve you.
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 will a 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 will differ between lenders, but usually, when you apply you will be asked for read-only access to bank statements from the last 90 days, details about your job or other income streams and how much you earn.
If the lender approves the loan, the agreement will detail 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 will often make a same-day deposit into your account.
How can I avoid the risks of no credit check 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. The National Credit Regulator (NCR) is the regulator of of the South African credit industry. Check to see if the lending provider is registered with the NCR.
- 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.
- Avoid applying multiple times. Every loan application shows up on your credit file. While these lenders might not consider your credit history, a lender will list every request on your file. Several applications within a short period negatively affect your overall credit rating.
- Check what fees the lender will charge. Check out the lender’s website for the fees, terms and conditions. You should also check what the loan provider will charge 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.
How can I compare no credit check loans?
Here are the factors to consider when comparing no credit check loans, from lenders that don’t check your credit history:
- Loan amounts. Lending criteria and amounts do differ, so your choice should depend on which lender can best accommodate your borrowing needs.
- Loan terms. The size of the loan determines the repayment period and associated fees. Shop around to see which lenders offer repayment terms that best suit your financial situation.
- Fees. Different loan amounts imply different fee structures, and other fees may apply for missed payments or settling the loan before the end of the loan period.
- Application time and turnaround. Thanks to online application forms and read-only access to bank statements, lenders can evaluate your situation almost immediately and approve applications quickly. Depending on when you apply, money is usually available on the same day or within one business day.
Frequently asked questions about no credit check loans
Are no credit check loans guaranteed?
No loan is ever “guaranteed”. If you see a lender promising guaranteed approval, you shouldn’t apply. Legitimate lenders that offer loans with no credit check still need to assess whether you can repay the loan, so will check your income, employment and bank statements to make sure.
I need the loan for an emergency, how quickly will I receive the funds?
How quickly you receive funds differs between lenders. Typically, you will receive your approved funds the following business day if you confirm your loan before approximately 4pm on a business day. Again, this differs between lenders, so it is best to check.
Besides bank statements and proof of income, what other information do I need to provide?
You should also have the following handy when applying:
- Driver’s licence or another form of ID, e.g. passport, Smart ID card
- Utility bills
Will the lender contact my employer?
In some cases, yes. The lender might need to verify you are indeed employed and receiving an income, especially since there’s no credit check for this loan type. A loan provider may specify on its website that it doesn’t tell your employer you’re applying for a loan.
Can I repay my loan early?
Some payday lenders will let you repay your loan early and don’t charge you an additional fee. However, you need to check the loan provider’s terms and conditions to make sure.
Are no credit check loans legal?
Yes, they are legal, if a lender is sure you won’t face financial hardship or struggle to make repayments.
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