Better No Credit Check Loans
If you’re in need of quick cash for an unexpected expense, but you have a poor credit score, it may be difficult to get the loan you need.
Traditional loans, and even credit cards, usually cater to those with fair to good credit scores. So what can you do?
Due to these issues, many people seek alternatives, and loans with no-credit-check may be a good option to give your financial health the boost you need. Don’t let the name trick you though, as lenders don’t just give money away without getting to know who they are lending money to!
Instead of performing a hard credit check, lenders use an alternative way of checking one’s creditworthiness — one that won’t affect your credit score. As a result, the loan application process is much faster.
Why Do Banks Perform Credit Checks?
Banks and lenders check your credit history to determine your creditworthiness and ability to repay any potential loan. That way, they can assess the risk of lending you money. People with lower credit scores usually get loans with higher interest rates, as lenders see them as a potential risk. Many people with a credit score below 580 have trouble securing a loan at all, and every time they make an inquiry and get denied that is recorded on the credit report, their credit score suffers even more. But even if you’ll have a bad credit history you’ll be able to apply for a bad credit loan. In contrast to traditional hard checks, many lenders today perform “soft checks” that don’t impact your credit score.
When you apply for a no-credit check loan your application will be evaluated based on your employment, current loans, and other credit data, to paint a picture of your financial situation without performing a hard check of your credit score.
How Do No Credit Check Loans Work?
The application process for a no credit check loan is straightforward, and you can either do it online or with a storefront lender. When dealing with a technology-forward lender, your loan request may be approved in just a few hours or even minutes. In many cases, you can apply for an online loan and get your money the very same day in some cases.
To apply for a loan, you will be asked to provide information about your employment, and bank details (to verify your income). Direct online lenders use this data, along with recent payment history and overall credit utilization, to determine the amount and the terms of the loan you qualify for.
Types of No Credit Check Loans
There are two types of loans offered by direct lenders that don’t require hard checks: payday and personal installment loans.
Payday loan is a popular short-term borrowing option. These types of loans can be approved within minutes, and are meant for unplanned, urgent situations.
Payday loans are repaid from your paycheck. They often come with a two-week term. Payday loans usually have high interest rates because of the short-term nature of the loans. Depending on your current financial situation, payday loans can be a practical choice.
The key thing to remember with payday loans is to work out a repayment schedule you can stick to, as late payments could mean additional costs.
Personal Installment Loans
Personal installment loans come with longer terms, lower interest rates, and are typically considered a safer and more affordable option than payday loans.
The total amount borrowed, along with interest and other fees, are paid back over a series of payments. That way, you don’t have to repay everything at once, and lower monthly payments are much easier to manage without stretching your budget.
Advantages of No Credit Check Loans
No-credit-check loans have an easy application process and are typically approved very quickly.
There are usually no penalties for early payments and paying back your installments on time helps build your credit score as your payment activity is reported to major credit bureaus. This way, you can improve your chances of getting an even better deal next time you take out a loan.
Disadvantages of No Credit Check Loans
The main drawback of no-credit-check loans is the potentially higher cost associated with them. Loan with no-credit-check can come with a higher interest rate, so make sure to check the interest rates from your specific lender.
There is also a limit to how much you can borrow depending on the lender and state regulations, so you may not be able to get the amount you want.
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¹Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications approved before 10:30 a.m. CT Monday – Friday are generally funded the same business day. Applications approved after this time are generally funded the next business day. Some applications may require additional verification, in which case, the loan if approved, will be funded the business day after such additional verification is completed.