The amount you can borrow without a credit check is often limited to less than £1000 but this varies between lenders. This type of loan is just what it sounds like, it allows you to get your hands on some money without having a credit check. They are similar in many ways to payday loans in that they are designed to help you out if you ever need to get money quickly to cover a more pressing debt or problem.

The rates are much higher than a secured loan and most other loan types. As you aren’t having a credit check then the lender is taking a bigger risk. Whenever there is a bigger risk for the lender there will be increased interest rates. The rates will vary depending on whether you are a home owner, the amount you want to borrow and your employment status.

This type of loan should only be used as a last resort as a secured loan with a full credit check will allow you to get a much better rate. The advantage of a no credit check loan is that it should still be available to you if you have a bad credit history including -

• County Court Judgments
• Individual Voluntary Arrangement
• Mortgage Arrears
• Missed Payments on Credit Cards

Many lenders specialise in this type of loan, one of these is Yes Loans who will try to find a loan for people knocked back by high street lenders. Another is Loan Site who again try to get fast loans for people who have struggled elsewhere. Remember though you should shop around if you do need a loan without a credit check as there are some companies out there who will take advantage of people in this type of difficult situation. You should only ever look at this type of loan when you have exhausted all other options or you need money very quickly.

If you struggle not to spend more than you earn every month then the first step is to make a budget. Write down all of your regular bills and all of your other expenses across a whole month. This will show you exactly where your cash is going. Remember to included everything from bus tickets to chocolate bars. You will be surprised how much is wasted. Obviously there will be some essentials on the list which we will come back to later but there will be a lot that can be cut out. Once you have the monthly figure you need to multiply it by 12 and then add in all the yearly expenses, and include things like holidays and one off treats. This will then give you a rough idea of your total annual spend. Now you need to subtract this figure from your total net income which will hopefully leave you with a positive figure. If it does then you are already doing well but you could probably do better. If the figure is negative then you could have a big problem.

If you have worked out that you are spending more than you are earning you need to do one of two things. Either reduce your expenses or increase you income. It is likely that it will be difficult to increase your income so you will be left with reducing your outgoings. The first thing to do is look at everything listed on your budget and decide what you don’t really need. Can you make do with one night out less a month or maybe cut out the takeaway coffees? You will be surprised how much you can save by making small changes. For example if you take a sandwich to work rather than buy one you will probably save about £4 a day. That is about £1000 a year! If you have managed to cut out any expense you can total it up again and see how it is looking.

You should do the following whatever the outcome as it is always good to save yourself some money. That is to assess your monthly bills, your gas, electric, mobile etc. You can use one of the comparison sites from my earlier post to do this for you. This is where you can make some big savings. You should do the same for your house and car insurance too. Hopefully once you have done all of this the figure from your budget calculations is now a positive one.

Assuming you are able to live within your means you should look to save about 10% of your income every month to cover any unexpected surprises. This means when they inevitably happen you can deal with it without having to get an expensive loan. Look out for the upcoming post on making the most of your savings to see what to do with your 10%.

You can then move on to the next step which usually means getting one large loan to pay off the other debt. The reason this helps is that you can usually get a lower interest rate for a larger single loan. You can tell if it is going to be better for you by working out how your new monthly payments will compare to the old ones. Not forgetting they time it will take to pay off the debt too. There is no point having a slightly lower monthly payment if you are going to be paying it for a lot longer. However if you need to reduce your monthly expenditure you should be able to work out a lower monthly figure in exchange for a longer term on the new loan.

This will allow you to manage your debt but the important thing to remember is that you need to have a strong desire to make it work. If you got in to debt through bad financial management then debt consolidation wont fix this. It requires will power to only spend what you can afford and this is the key to not getting in to a bad financial situation again. Debt consolidation loans are just a tool to help you on the way.