The credit check is an important step that lenders take when evaluating your loan application. Through credit check, they will be able to assess your capacity to pay the loan – based on financial history and credit score. This is also the part that makes applying for loans difficult and lengthy. If you want to skip the credit check procedure, you have quite a few options in the market. Whether or not you have a poor credit score, you can skip the credit check and get the funding you need through a variety of personal loan types.
While difficult, this process is achievable once you know the steps that should be taken. You can learn more about how to find personal loans with no credit check and what options are available below.
Tips for Finding Personal Loans with No Credit Check
Even with your bleak financial situation, you can get cash assistance from personal loans with no credit check. There are plenty of them to choose from – it is up to you to know how and where to look! You can follow the steps below to make the search easier:
- The first step that you need to do is go to trusted banks. A traditional lender might be willing to provide you with personal loans with no credit check. There is no harm in trying to see if you can qualify for a loan without the need for a credit check. You can also try local credit unions. Ideally, you should have an existing relationship with the said institution before you approach them. If you have a good standing with the said financial institution, they might consider providing you this type of loan. If they do not offer personal loans with no credit check, only then should you consider expanding your search in other areas.
- Aside from major banks and credit institutions, you might want to consider micro lending firms as alternative. Micro lending is a type of loan that is offered by individuals to other individuals who are generally not accepted by banks for loans. The group can contribute a certain amount to achieve the total funds that are requested by the lender. A credit check might be performed but not for the approval of the loan, but rather to compute the interest rate placed on that loan. A borrower with good credit rating can get a loan for only 5%! For high-risk borrowers, the interest rate can go up to 30%.
- Be prepared. When you approach banks, micro lenders, and other financial institutions for personal loans with no credit check, get your documents ready. You need to obtain a copy of your tax returns (ideally for the past two years), employment certification, pay slip, and so on. The requirements will vary depending on which lender you are applying the loan for.
Loan Options Available
Personal loans with no credit check is available if you know where to look. To get you started, here are some of the loan types available if you do not want to undergo the credit check procedure:
- Payday Loans – This is the most common type of loan that is sought after by those who are looking for loans with no credit check. This is also known as cash advance loan. This type of loan only provides you with a small amount of money, often equivalent to your monthly paycheck. However, it comes with high interest rates and other fees (for late payments). To avoid the high fees, you need to repay the amount in full within your next paycheck. It is a good option if you have poor credit score and want to get instant access to funds. Most payday loans can be released within 24 hours.
- Title Loans – The title loan is another good option for those in search of personal loans without credit check. You can use the title (or certificate of ownership) to any item of value, such as your home, car, or motorcycle, in exchange for access to cash. The title will serve as collateral, in the event that you are unable to repay the loan. You can inquire about this type of loan from banks, cash advance offices, and pawnshops. It is important that you read the fine print before you pursue this type of loan. You would not want to end up losing your vehicle or home for quick cash.
- Credit Card – There are lots of credit card companies out there that offer the cash advance option to their card holders. If you need quick cash but do not have the best credit standing to get approved for a loan, you can choose this instead. When using cash advance via your credit card, make sure to pay off the amount as soon as possible. Otherwise, you could quickly fall down the rabbit hole. Be diligent in the use of your credit card to access funds.
- Online Lenders – There are many online lenders out there for those looking for quick cash. This type of lending service is targeted primarily towards people with poor credit score. If you are looking for loans without credit check, you might want to consider them. While there are many online lenders that are scam, there are a few legitimate ones. It is your responsibility to screen through each option to make sure that they are a legitimate business. Some online lenders can even provide you with cash within an hour or so. Make it a habit to double check if the lender is properly licensed. Also, look for the company’s phone number so you can speak to them directly about your intent to apply for a loan with no credit check.
Above all of the tips mentioned, the most important thing to consider is to make sure that applying for personal loans with no credit check is the only option you have. More often than not, these loans can charge you with extremely high interest rates (in comparison to traditional loans). Due to the ease of the process with which you can get the money from the lender, they mitigate the risk by charging you with a higher interest rate.
Bad credit score can also affect your ability to get personal loan. If the need for the money is not urgent, you might want to consider fixing your credit score first. Once your credit score improves, you will be in a much better position (financially-speaking) to obtain a loan without the high interest rates. But if you are in an urgent need of money, it is a relief to know that you have other options too, especially for those who want to avoid the dreaded credit check.
Robert is our in-house expert on personal loans and finance. He got an MBA, specializing in Finance, before joining the workforce. After working for multiple Fortune 500 companies in the past decade, he brings a wealth of knowledge and experience to the table.