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Whether you need to fix your car or pay an unexpected medical bill, taking out a loan can help you achieve your financial goals.
Unfortunately, banks and credit unions usually perform a credit check before they lend money, making it difficult to qualify if you have poor credit or a no credit history. The good news is that many companies now offer loans with no credit check, making it easier than ever to obtain funding.
To help you make sense of your loan options, we compiled information about no credit check loans, paying close attention to the two most popular options: payday loans and personal installment loans. Use this guide to learn more about these alternatives to traditional loans.
A no credit check loan is a type of loan that you get without going through a hard credit check.
Before approving a loan, most lenders want to see your credit file, which includes a list of your accounts, balances and minimum payments. Each credit report also documents late payments and other information about your financial habits. A no credit check loan dispenses with this requirement, making it easier to qualify if you have a low score or limited credit experience.
There’s no guaranteed approval with this type of loan. In other words, just because the lender is willing to skip the credit check, doesn’t mean you won’t be denied the loan. Before disbursing any funds, a bank, credit union or consumer financing company needs to know that you can repay the loan.
They assess your ability to pay by collecting the following information:
Whether you have poor credit or no credit, you still have options.
For example, many companies offer payday loans and personal installment loans. Here’s what you need to know about these alternatives to credit-check loans:
A payday loan is a short-term, high-interest loan designed to be paid back with your next paycheck. For example, if you get paid on September 15 and take out a payday loan on the same day, you’d have to pay it back on September 29. This assumes that you get paid biweekly.
Some lenders offer payday loans with extended repayment plans. If you can’t afford to repay your no credit check loan on your next payroll date, an extended repayment plan allows you to make smaller payments over time.
When you take out this type of no credit check loan, you have to give the lender a bank account number and a routing number. This makes it possible for the lender to deposit the funds directly in your bank account instead of giving you a check to cash.
If you have no credit, you may qualify for a personal installment loan issued by a lending company. This type of no credit check loan allows you to repay a lump sum of money over several months or years. For example, if you take out a no credit check loan with a 36-month term, you have 36 months to pay back what you borrowed. If the loan has a fixed interest rate, you’ll pay the same amount of money every month until the loan is paid off.
Remember, there’s no guaranteed approval for no credit check loans.
Generally, you need to earn enough income to make the lender confident in your ability to pay back a personal loan or a payday loan. You may also need to provide collateral or prove that you have steady employment.
Be prepared to provide the following information when you apply for a no credit check loan:
Before agreeing to any loan terms, take the following steps to find the best no credit check loan for your needs:
In most cases, loans with no credit check are a bad idea.
These loans have high interest rates and other unfavorable terms, making it difficult to pay them back as scheduled. If you take out a payday loan for a few hundred dollars, you may end up paying back thousands in interest and fees. Except in a true financial emergency, it’s better to wait until you can qualify for a traditional loan. Always calculate the interest on your loan before taking it out to make sure you can afford it.
If you don’t want to take out a no credit check loan, here are some alternatives:
Generally, no. The types of loans that require no credit check often come with high fees and high interest rates, making them unaffordable for many borrowers.
It depends on the type of loan that you need. If you apply for a no credit check loan, you don’t need a specific score. If you apply for a secured loan or an unsecured loan with a traditional bank, you may need a score of 700 or above. It depends on the lender’s policies.
It depends on the lender, but no credit check loans usually offer no more than a few thousand dollars.
Some financial institutions offer free credit scores to customers. If your bank or credit union isn’t one of these, you can check your FICO® scores by going to MyFICO.com and paying a fee. Another option is to sign up for Credit Karma or another service to see your VantageScore® from Equifax and TransUnion.
Leigh Morgan is a seasoned personal finance contributor with over 15 years of experience writing on a diverse range of professional legal and financial topics. She specializes in subjects like navigating the complexities of insurance, savings, zero-based budgeting and emergency fund development.
In the last five years, she’s authored over 300 articles for credit unions, digital banks, and financial professionals. Morgan is also the author of “77 Tips for Preventing Elder Financial Abuse,” a book focused on helping caregivers protect the elderly from financial scams.
In addition to her writing skills, she brings real-world financial acumen thanks to her previous experience managing rental properties as part of a $34 million real estate portfolio.
Blake Esken has over 15 years of experience in product management and has been a member of the Los Angeles Times staff for over five years.
As part of his role at the Los Angeles Times Commerce Team, Blake acts as the in-house reviewer and fact checker for LA Times Compare. He supervises all content for compliance and accuracy and puts to use skills he has honed through years of experience managing high-stakes projects for a range of industry-leading companies.
He has a strong background in data analysis, compliance, and communication, which allows him to support LA Times Compare through fact-checking in an effort to provide up-to-date and factual information across our content.
