What should you do when you need financial help but have a poor credit score, so no bank will loan you money? Enter no credit check loans.
As the name implies, the lenders of these loans won’t check your credit score to assess your creditworthiness. This makes them ideal for people with bad credit. However, those with good credit can also use these loans to help manage their finances.
Want to know more? Let’s explore everything you need to know about no-credit-check-loans.
An Introduction to No-Credit-Check Loan
When you apply for a no-credit-check-loan, the lender will use other factors to determine your creditworthiness, such as:
- Bank account history
- Collateral (for secured loans)
They will not run a hard credit check or do a “hard pull,” which shows up on your credit report and can negatively affect your credit score.
However, because these lenders don’t check your credit, they charge higher interest rates than other types of personal loans. Some lenders have an interest rate of up to 40%.
They may also have higher fees and penalties for missed payments.
Types of Loans That Don’t Require a Credit Check
When one thinks of no credit check loans, they often think of fast loans you can get online. While these are some of the most common no-credit-check loans, they aren’t the only ones available.
Let’s see what your options are.
Payday loans are small, short-term loans. They are called payday loans because the intention is that you pay for the loan when you receive your next paycheck.
The term has gotten a bad reputation in the last decade. So now, many of these loan providers call them something different, such as:
- Cash advance
- Fast loans
- Installment loans
- Online loans
- Short-term loans
Regardless of the name, the concept remains the same. You apply for a loan online, receive the cash fast, and pay off the loan within the next few weeks.
Payday loans are supposed to hold you over until your employer pays you again.
Yet, they are not the right loan for you if you have a major expense over $1,000. Most payday loan lenders don’t give borrowers more than this amount. Some lenders only have loans up to $500.
If you get a payday loan, ensure you pay it off according to the specific terms and conditions to avoid late fees and penalties, which are often stiff.
Installment loans let you borrow a lump sum of money you repay through fixed monthly payments.
They typically have a higher borrowing limit than payday loans, so this would be a better option if you have a bigger expense to cover, like a car repair or an unexpected doctor’s visit.
Additionally, the interest rates on installment loans are usually better than payday loans. Yet, ensure you read the fine print of the loan agreement. Even if the interest rate is lower, it could still be high compared to other loan options. There may also still be high fees and penalties for missed payments.
While not all installment loans are no-credit-check loans, some options are available. For example, at Kingcash, we offer quick loans up to $750 with installment options.
Car Title Loans
A car title loan uses the value of your car as collateral to issue you a loan. Thus, most car title loan lenders require you to own your vehicle outright to qualify.
Usually, you can still drive your car as you repay the loan. But if you miss a payment, the lender can repossess your vehicle. This would not be a good situation because you would lose access to reliable transportation, which could affect your job, family, or other responsibilities.
Further, car title loans have higher interest rates, similar to payday loans.
How to Get a No-Credit-Check Loan
If a no-credit-check loan is right for you, follow these steps to get your money!
First, you need to find a lender. Do your research into the different types of lenders and compare their terms. Especially look at the following:
- APR (interest rate)
- Loan amounts
- Payoff terms
If you’re applying with an online lender, next, you need to fill out an application. The application shows who is eligible to apply for the loan.
You can get pre-approved if you’re applying with a non-online lender, such as a bank or other money lender. Although applying for the loan won’t hurt your credit score, pre-qualification helps you estimate your interest rate before applying. Once you get pre-approved, you can send in your application.
Now you wait to see if the lender approves you for the loan. For online lenders, the decision may happen almost instantly. If not, you’ll usually receive an answer within 24 hours. If you’re applying with a non-online lender, you’ll need to wait a few days for a decision.
After approval, you’ll receive your funds. Again, this may happen relatively quickly with an online lender, whereas it can take a few days with more traditional lenders.
Alternatives to No Credit Check Loans
If a no-credit-check loan isn’t for you, don’t fret; you still have options. You can consider these loans instead:
- Bad credit loan
- Co-signer loan
- Credit card
- Credit union loan
- A loan from a family member or friend
- Pawnshop loan
- Secured personal loan
At the end of the day, each loan type has pros and cons, so before choosing a loan, always do your due diligence. The right loan for you is not the right loan for everyone else.
Get a Loan From King Cash
If you find yourself in a financial bind, a no-credit-check loan could be just what you need to get you back on your feet.
Don’t hesitate to apply for Kingcash’s online no credit check loans. Customers have given our financial services company 4.5/5 stars on Trustpilot with rave reviews of our fast loans in Canada.
And if you still have questions, check out the Frequently Asked Questions (FAQs) page to learn more.