In March 2022, CTV News reported that Canadian households owed $1.86 for every dollar of disposable income they made. If you recognize yourself in those numbers, you’re not alone.
Like a constant dripping in the background, however, financial pressure has a way of catching up to people. Sometimes you’re able to right the ship and sail without problems. But most times, you’re a high power bill away from being unable to make ends meet.
No credit check loans are often promoted as a financial option for Canadians. But are they worth pursuing? Keep reading to learn more about the pros and cons of no credit check loans.
Understanding the Pros of No Credit Check Loans
Like the name says on the tin, no credit check loans are a loan option that lets Canadians skip the “credit check” part of the traditional lending process. But are these types of loans a good idea? Here are some commonly accepted benefits of getting a no credit check loan:
1. Fast Approval Times
When the roof is leaking and the fridge has broken down, you don’t have time to let the bank do its thing. You need money right away.
One advantage that no credit check loans have over traditional loans is speed.
There’s no lengthy interview process. And you don’t have to wait for the underwriters to assess your application. In fact, lenders like us will often do same-day approvals and deposits.
If you need money in a pinch, a no credit check loan can deliver.
2. You Don’t Need Amazing Credit
In life, not everyone has the luxury of being dealt a winning financial hand. Maybe you spent an extended amount of time unemployed, or perhaps you had an unexpected career change. In addition, sometimes it can take a while to learn how to manage your credit.
Unfortunately, those past financial choices can linger in your credit report even if it’s not an accurate reflection of who you are.
With a no credit check loan, you don’t need impeccable credit to get approved. In fact, the lender doesn’t even consider your credit history. If you’re employed and financially stable overall, you have a strong chance of getting the money you need.
3. Simple Applications
Remember the last time you applied for a major loan?
After providing your ID, your tax returns, and your pay stubs, you likely sat through a lengthy interview before the application was assessed. When you’re a major bank, you have to cross your t’s and dot your i’s. We get it.
But this still adds up to a lengthy and time-consuming process on your end.
With no credit check loans, you don’t have to spend several hours putting together an application. If you’ve got your banking information ready to go, you can finish the process in less than 10 minutes.
Getting to Know the Cons of No Credit Check Loans
From the fast deposits to the straightforward application process, no credit check loans might sound like a dream come true. However, as with most financial resources, these loans do come with certain risks. We’re going to go over a few of those now:
1. Smaller Borrowing Amounts
Imagine you’re in the process of driving home when your car breaks down. After a quick evaluation, the mechanic says you’ll need about $4,000 to cover the cost of repairs.
Can a no credit check loan help in this situation?
The answer is, “Not unless you’re paying most of the bill in cash.”.
While no credit check loans are an awesome source of funding in an emergency, they do have lower borrowing limits. If you’re covering the other half of that outrageous utility bill from January, these loans can help you keep the lights on. But if you’re looking for a number in the thousands or tens of thousands, no credit check loan providers may not be able to cover those amounts.
2. Freelancers Can’t Apply
No credit check lenders are prepared to disregard your credit history. And they don’t require you to be making huge amounts of money to have a shot at being approved. But there is one rule that many companies tend to have:
They only lend money to employees.
So what does that mean if you’re self-employed or paid on a commission-only basis? You may be out of luck.
A few years ago, Statistics Canada discovered that eight percent of Canadian workers had participated in the gig economy in 2016. And in the wake of COVID-19, the number of people earning money in nontraditional ways has likely continued to rise since then.
But at least for now, gig workers and freelancers will generally not be eligible for no credit check loans.
3. You Have to Watch for Scams
Imagine you’ve succeeded in getting a loan. You’ve already mapped out your loan repayments and you know deep in your gut that this financial injection was exactly what you needed. And now that you’re approved, all you have to do is wait.
And so you wait. And wait. And wait some more.
A few days later, the money still isn’t there. And there are charges in your bank account that you don’t recognize.
Because online loans are so convenient and accessible, fraudsters are always looking for ways to steal your personal information. What better way than by “guaranteeing” a loan and making off with your banking information?
When you’re walking into your local Big Five branch, the word “scam” probably doesn’t even cross your mind. But with online no credit check loans, scammers are everywhere.
Should You Apply for a No Credit Check Loan?
As far as loan options go, no credit check loans have a lot of positives.
You can apply for funding without compromising your job search. You can get the money right when you need it. And even if the circumstances around your application are stressful, the no credit check loan application process is surprisingly painless.
However, even with these pros, there are still negatives you need to watch for. Your borrowing amount may be limited, your profession has a direct effect on your approval, and scammers are an application hazard.
That being said, if you want flexibility and speed, no credit check loans are hard to beat.
Do you need money right now? We’ve got you covered! Claim your cash today.
