Misfortunes such as sudden job loss, poor health, and the death or illness of a spouse do happen, oftentimes quite suddenly. At times like these, monthly bills continue to come in the mail; food and other necessities won’t wait either. When these problems arise, even someone with good credit for many years can find their finances in shambles. These types of scenarios present the need for a loan without a credit check.
The first thing a lender does is to run a credit check on the applicant. This provides a record of the debts and payment history in addition to the credit score. What the report includes can make or break the deal when it comes to getting a loan. It is a snapshot of how the applicant handles finances.
The numbers on the credit report include:
Although other items factor into whether a loan is granted, like income and assets, the credit check weighs in heavily. Ideally, a credit check will come back with a decent credit score (at least in the mid 600’s) and a number of accounts in good standing proportionate to income. Little or no inquiries is a sign the borrower is not applying for too much credit. Zero delinquencies, late payments or bankruptcies also boost the chances of approval.
But not everyone has a credit score that can get them a personal loan from banks, credit unions and other financial institutions. Despite the fact that a large number of fortunate people have good credit, many suffer mishaps which ruin their credit. Some have had bad credit since their teenage years and are proud of it. Still others are fresh out of school without getting a chance to build any credit at all.
Although they’re in different stages in their finances, the common denominator with all of these borrowers is that they can find themselves cash strapped at the worst of times. It is for that reason loans without credit checks were made available. They allow people with very low credit scores to get money based on other factors besides credit rating.
In several respects the terms offered with no credit check loans are different than those presented by banks. Not all kinds are available in every area, so borrowers should check first to see if the loan they are interested in is offered where they work or live.
Some common types of no credit check loans:
When an individual is in an urgent financial situation, a bit of research will turn up even more no credit check loan types. But no matter how dire the circumstances, it is important to know that these loans can come with terms and conditions that might make borrowers decide to find other means to get funds they need.
As the saying goes, “All money is not good money.” With this in mind, borrowers should approach no credit check loans cautiously and fully informed. There can be very serious results from a loan of this type going bad (or unpaid).
Some pitfalls to look out for:
Some borrowers have been scammed by online lenders who were not licensed in their jurisdiction. It is essential that a potential lender is checked out to ensure that they follow regulations in the location in which they operate. A reputable lender will provide verifiable contact information on the website.
Getting a loan without a credit check can cost loads in the form of high interest rates and fees. Therefore, they should be used with caution and only if truly necessary. Even in what may seem to be a crucial financial situation, there may be alternatives to committing to this type of loan.
Other possible solutions include:
Some of these ideas may work but when a crisis occurs in which money is needed immediately, a no credit check loan could be the only way to resolve the problem. If so, formulating a plan to repay the loan is cost effective and a way to make the process as painless as possible.
The rules of a loan without a credit check are different from regular loans. But borrowers can use some financial hacks to shave off some of their costs. For example, pay day and other loans are extremely pricey if they are paid in small amounts from each paycheck. Paying off the whole loan with the first paycheck nips the money wasted on fees and interest in the bud.
The same principle applies to no credit check credit cards; repaying the balance before the introductory rate ends saves hard earned money. How to repay a loan of any type is by paying it back as fast as possible. A financial emergency is stressful enough without the hassle of late payments, bill collectors and never-ending top dollar interest payments. But if utilized correctly, a loan without a credit check is a saving grace during an unpleasant season as it is intended.