In need of a loan but don’t want to go through a credit check? Luckily, there are plenty of options for you. Dive into the world of no credit check loans.
Last year, 34% of Americans took out personal loans – that equals about 83.5 million people!
But if you don’t have excellent credit it can be difficult to get approved by traditional lenders. Loans with no credit checks may be the answer for you. But do you know how these loans work?
Read on to learn everything you should know about no credit check loans.
What Are No Credit Check Loans?
No credit check loans are loans that don’t require a credit check in order to loan you funds.
For these loans, the lender doesn’t consider your credit history. Typically, no credit check loans are short-term loans for when you need cash fast.
These loans are aimed at people who have low credit ratings who likely won’t be approved for a traditional loan.
Why Use a No Credit Check Loan
Lenders hand out no credit check loans based on your current income level, regardless of your past credit history. As long as you can prove that you have recurring income in order to pay back the loan, you’ll be approved.
The best benefit of no credit check loans in 2019 is that these loans have a fast and simple application process. You can often get the funds the same day, sometimes within the hour of applying!
Best of all, approvals are immediate. You’ll know right away if you’ve been approved and for how much.
No credit check loans are also useful for people who don’t want a credit inquiry to show up on their credit history. If you have just applied for a car loan or a mortgage, you don’t want to mess with that application by having another application in progress. So a no credit check loan makes sense.
The downside to loans with no credit is that there can be high-interest rates and fees that add up if you don’t pay back the loan by the due date. That’s why it’s important to choose a loan that works for you.
Common Features of No Credit Check Loans
No credit check loans can vary depending on the lender you choose. Get more info here.
Typically, you can expect to have a fixed interest rate and clear terms to the loan. You won’t need a credit check to qualify. The best no credit check loans don’t have origination fees.
Remember, lenders are free to make their own terms. There are lenders who know that some people are desperate and so will take advantage of this fact and offer unfavorable terms. Make sure you always carefully read and understand the terms of any loan before you accept.
How to Qualify for Loans with no Credit Check
Qualifying for a no credit check loan is easy. You fill out a short application (more often than not, you do this online although there are some in-person).
You will need to provide your bank account details and paycheck information. The lender will then have access to your bank account. On the due dates of your loan payment, the lender will automatically withdraw the amount from your bank account.
In order to qualify for loans with no credit check, you must be between the ages of 18 and 65, have a regular source of income. You will need to have an active phone number so that you can receive text and voice messages.
You also need to be a US resident.
Credit Checks = Lower Credit Score
Each time a lender or financial institution checks your credit, your score drops. It really isn’t fair but unfortunately, that’s how it works.
When you need to borrow money, traditional lenders perform a hard check your credit. This shows the mender your credit report and history so they can decide if they should loan you money.
As a result, this check lowers your score. If you aren’t approved by one lender and shop around for a loan, guess what? All those hard credit checks in a short amount of time will take a toll on your credit score.
Credit reporting systems like FICO will see all these checks as a sign that you are desperate for funds. This signals to them that you are mismanaging your funds or are on your way into deeper debt.
This can be a vicious cycle that many people get stuck in. Then once they have a low credit score it can be hard to be approved for traditional loans.
What Is a Soft Credit Check?
It’s important to understand that a soft credit check or inquiry does not affect your credit score.
Some lenders will run a soft credit check before they approve you for a loan. These soft inquiries are usually not recorded on your credit report and won’t be visible to current or future lenders.
A lender can run a soft inquiry even without your consent. This happens a lot with preapproved credit cards and loans. THat’s why credit scoring systems don’t use soft credit checks to calculate your credit score.
Hard credit inquiries, on the other hand, do affect your credit score. And you do have to give signed permission for a lender to run this type of credit check.
Warning Signs To Watch Out For
As we mentioned earlier, there are loans that aren’t in your best interest. Be wary of loan companies that have one or more of these warning signs.
You Can’t Talk to a Real Person
It’s convenient to apply for loans online. But you should be able to pick up the phone and talk to a customer service rep if you want to.
If the company doesn’t have a phone number, look for another lender.
The Lender Doesn’t Care About Your Income
Some loan companies “guarantee” everyone is approved for a certain amount of money. This is irresponsible lending.
These lenders want to lend you more than you can pay back so they can charge you huge fees and interest. Avoid them and choose lenders that ask about your income.
A Lender Wants Charges Application Fees
You should never pay to apply for a loan. If any company asks for upfront fees, choose a different lender.
There are plenty of options for no credit check loans that you can apply to for free.
Thanks for reading. We hope this guide on no credit check loans in 2019 helps you understand what to look for in a lender.
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