Almost everyone in the United States has obtained a loan at some stage in their life. Personal loans are a great way to help pay for a variety of costs or expenses for everyday consumers. But having a bad credit score can mean that you don’t have the option to borrow money in the same way that many Americans do. Your credit score is the number one thing that lenders check when they’re trying to decide if you are eligible for their financing.
If you’ve ever wondered if you can obtain personal loans with no credit, you’ve come to the right place. Many of our readers ask us if there is a way to obtain a loan without having to have their credit report checked. The answer is a bit complicated. In this guide, we will explore this question and offer our readers various avenues to obtaining loans without having their credit checked. We will also explore some alternatives that might remedy your situation.
There are plenty of questions that you may want answered if you’re trying to find out more information about no credit check personal loans. The subject can be confusing, and there’s a lot of misinformation provided online. It’s important you’re as aware as possible about the different ramifications of getting personal loans with no credit. Make sure to read as much of this article as possible before starting your search for a lender!
The Problems with Credit Checks
Credit checks are a pain for a variety of reasons. This is why many people seek to avoid them during the lending process. It can be a complete pain having your credit report checked by a lender, it can even damage your credit score. Below we will outline the two primary reasons that people have problems with credit checks.
Every time that your credit score is run by a lender or business, it is recorded on your credit report. This is done in order to show how often you are having your credit report pulled. This is valuable information to lenders, as it shows how often you are applying for finance. Lenders will not want to lend money to someone who frequently applies for loans, this shows that you are potentially a risky borrower.
For this reason, every time an inquiry is recorded on your report, your credit score will drop around 15 points. Over time, this can have a huge impact on your credit score. In addition, some lenders will have limits on the amount of recent inquiries you can have on your report. Even if you have a high credit score, your application may still be denied. That’s why it’s important to keep credit checks to a minimum – you should only have your credit checked when you really have to.
The other major problem with having your credit report checked is the fact that you may have a low score. If you have a low credit score, it can be extremely hard to get financing. For this reason, it’s good to avoid having your credit report checked if you have a score that you don’t think will be approved. This is one of the primary reasons that people want to avoid having their credit checked for personal loans.
In addition, there may be certain items on your credit report that you know will disqualify you from being able to borrow money. This will also create problems for you if you end up having to get your credit checked for a personal loan.
Hard Vs. Soft Inquiries
The reality is that there aren’t many lenders out there that are willing to lend you money without checking your credit. Doing so would be downright irresponsible – what if you have declared bankruptcy multiple times? Not checking the credit of your borrowers is a sure-fire way to go out of business. But there are actually two types of credit checks, and they impact your credit score in drastically different ways. We will explore these two types of credit checks in more detail below.
This is the inquiry that was discussed before. It will record on your credit report and create serious damage to your score. This type of inquiry provides the lender with a full overview of your credit history. It is the type of check that the majority of lenders will take on your credit report if you apply for financing. You want to avoid this form of credit check if you can.
A soft inquiry is a surface level check on your credit report. It doesn’t provide the full details of your credit history, but it does provide a pretty good overview of what type of borrower you are. This type of credit inquiry doesn’t impact your credit score at all, which is awesome if you’re trying to avoid damaging your score.
Personal Loans No Credit Check: Who Provides Them?
So, after taking in all this information about finding lenders for personal loans with no credit, you might be wondering who provides no credit check personal loans. There are two primary ways you can receive this type of a loan. We will explore your major options in more detail below.
Soft Credit Check Lender
This is a lender that will run a soft credit check on you if you want to get a loan without damaging your credit score. These types of lenders are not extremely prevalent, so you’ll have to do some searching if you want to find one. It’s very important that you make sure that the lender is providing you with a soft credit check – you don’t want to find out after the fact that a hard inquiry was recorded on your report.
Keep in mind that the major benefit of this is the fact that you won’t have an inquiry recorded on your credit report. If you’re trying to avoid a credit check because you have something to hide, this probably isn’t your best option. A soft credit check still provides the lender with plenty of information about your credit history. They’ll be able to see any major problems pretty quickly.
Peer to Peer Lending
This form of lending is also good for those who don’t want credit checks. Many peer to peer lenders will not check your credit history, instead they will charge you higher interest rates. Depending on your budget, these interest rates may still be affordable for you. The good thing about peer to peer lending is that not only does it help you avoid an extra inquiry on your report, it also means you won’t be denied because of items on your report.
Peer to peer lending is a lending concept that allows other consumers to lend to consumers. It means that the money you are borrowing is not from a traditional lending source. Instead, investors provide money that is given to you and you pay them back the money you owe them with added interest. Typically, this is done through an online platform that takes a small commission for facilitating the transaction.
While this is a nonorthodox way to borrow money, it is becoming increasingly popular in the United States. Keep in mind that the risky nature of the loan means that you won’t be able to borrow large sums of money. On the plus side, many of these lending platforms can get you money in your account within 24 hours of approval!
Personal Loan No Credit Check: What to Avoid
If you’re looking to get no credit check personal loans, you need to realize there are a few things you have to avoid. People understand that those who are trying to get personal loans with no credit may be desperate – you’re an easy target for predators. Make sure to avoid all three things mentioned below.
There are plenty of online companies that try and lure borrowers in by making large claims that they will most likely be unable to fulfill. You don’t want to get sucked in by a headline that states you will be able to get personal loans with no credit. Many of these claims are false. You should always make sure to call the lender and double check that they will not be running your credit report. You don’t want them to end up creating an inquiry on your report and damaging your score.
Payday loans are another issue that should be entirely avoided by borrowers looking for no credit check personal loans. The payday lending industry in the United States is booming. People get sucked into payday lending because you don’t have to get a credit check to be approved. Instead, you just have to have proof of an upcoming pay check. The fees to borrow through these lenders are extremely high.
But the devastating part about payday loans is the interest rate tied to the loan if you don’t pay it in full after your first due date. The rates can be above 1,000% — an astonishing number when you compare it to any other form of personal finance. These lenders are predators – steer clear if you can!
Title loans are similar to payday loans, except they are attached to the title of your car. You use the title of your car as collateral to receive capital from the title loan lender. While this is also common if you want to secure a loan with a regular personal loan lender, title loans have much higher interest rates. This is because they don’t run credit checks and they can give you cash the same day that you sign up for the loan. Avoid these types of loans at all costs, the interest rate is way too high!
If you don’t find any of these options suitable, you may be wondering what your alternatives are. If you’re going to get an unsecured loan with a soft credit check or no credit check, you are most definitely going to be paying more in interest. That’s why it can be good to focus on getting a traditional personal loan if you can.
The best way to do this is to improve your credit. You should start by checking your credit report and making sure that there aren’t any mistakes. Millions of Americans have mistakes on their credit reports, so it’s worth making sure that you aren’t one of them. You can request mistakes be removed by the credit reporting bodies. If they refuse, credit repair agencies can help you speed up the process.
Aside from checking and correcting mistakes, you can also pay down your credit card debt. This plays a huge role in the credit score you have, so paying your credit card balances down goes a long way in making sure that you have the best chance possible of securing a low-interest personal loan.
Personal Loan No Credit Check: The Verdict
The reality is there is no secret formula to getting a personal loan with no credit check. You need to make sure that you’re fully aware of the type of loans you can get without severely impacting your credit. Your best and most affordable option is to look for lenders that only run soft credit checks on your credit report. Keep in mind that many lenders that offer no credit check personal loans are predators – they don’t have good intentions for you or your family.
We like to help our readers get off on the right foot. That’s why if you head to our homepage you’ll find the lenders that we suggest you work with. It’s a good starting point if you’re just beginning your search for a lender.
Don’t rush into any decisions, the more loans you apply for, the more you will damage your ability to be approved. Applying for multiple loans in quick succession is a red flag to lenders – don’t give them any reasons to think you’re a bad borrower.
If you have any other questions about personal loans, check out the other articles we have posted on our site.