A no credit check loan can be the most suitable form of cash assistance if you carry low credit score or have no credit history at all. However you should be prepared that such loans may come at a very high interest rates as well as APRs. These loans may also have short repayment terms.

High APR and short repayment terms are the cost of borrowing loans if you do not have the required credit profile. Before you start looking for no credit check loan, know why these loans can be risky, how to evaluate these loans and what alternative sources of money you should look for.

Is there any cheap source of cash assistance?


If you are looking for cheap and affordable source of cash assistance, think of installment loans. With these loans, you get all the money at once but repay the total amount in small parts called installments over the entire loan duration which may last for months or years instead of weeks.

To offer installment loans, lenders check your credit profile and do not ask you to provide any collateral. Also, the loan amount offered usually remains higher than cash loans. There are many lenders that offer installment loans for bad credit to consumers who do not possess good credit score.

What is a no-credit-check loan?

As the terms itself define, with a no credit check loan lenders do not assess your credit history or consider your credit score to decide whether to offer you a loan.

Credit history is usually a key factor in evaluating your eligibility for a loan by lenders. However payday lenders and other lenders that offer high interest loans skip credit checks.

But why do they skip credit check? Remember your credit history or credit score explains to lenders how you managed your previous debts and how likely you are to repay a new loan.

Knowing your past credit track record, your ability and habit of making timely payment and your financial stability make it very easy for lenders to decide whether you are a good fit for their loan. In the absence of such information, it becomes very risky for lenders to offer you any loan.

What is a bad credit score?

The FICO credit score ranges from 300 to 850. In this range, any score below 580 is considered a bad credit score.

Cause of bad credit score:

A bad credit score is mostly an outcome of late, delayed or poor payment history, defaults in payments, very high usage credit, numerous credit applications, several hard credit check enquiries. These are the most important factors that build up your credit score. If you want to avoid bad credit score, never neglect these aspects.

Impacts of bad credit score:

Since bad credit score is a result of poor payment history and unstable financial standing, lenders may consider you very risky to offer any loan. A poor credit score can make it difficult for you to borrow loans at affordable rate of interest. It would also be difficult for you to qualify for loans such as car loans, mortgage or a loan for business.

How to improve your credit score:

If you want to borrow loans at low APRs and qualify for all categories of loans, you should take immediate steps to improve your credit score.

Therefore no credit check lenders mitigate this risk by charging very high annual percentage rates. Also, since there are many consumers that do possess good credit score, it is a big market out there for lenders. Therefore they take risk by offering no credit check loans but mitigate this risk by charging high APRs.

This is also one of the reasons why these loans are offered for a few thousands or less with short repayment terms of few weeks to months. Such short repayment terms to a person who is already facing financial trouble makes it difficult for him or her to repay in time, which leads to a debt cycle in many cases.

Are there any alternative to No-credit-check loan?

No credit check loans are great source of cash if you have poor credit score and are in financial distress. However these loans come at a very high cost and carry very short repayment terms. As a result, it becomes very easy for many consumers to fall into a debt cycle.

Therefore you should keep no credit check loans as your last recourse and must explore alternatives to these loans which not only come at comparatively lower cost but also carry favourable terms.

Here are a few alternatives to no credit check loans that you should explore before plunging to borrow these costly loans.

Alternative to No-credit-check loan!

Loans from Credit Unions Secured and Unsecured Bad Credit Personal Loans
Buy now, pay later companies Student loans for bad credit
Cash advance apps Auto loans for bad credit
Online lenders home equity loans or HELOCs
Loans from Credit Unions:

There are many credit unions that offer small personal loans of $500 or more. Federal credit unions charge an interest rate of upto 18% which is much lower than that of traditional no credit check loans.

Credit unions consider your history as well as standing as a member of the union to check your eligibility. Many credit unions also offer starter credit cards or loans to help you build your credit history.

Payday alternative loans:

Payday alternative loans, also known as PALs are also offered by credit unions as small dollar assistance to consumers to help them avoid debt trap created by traditional payday lenders. Credit unions charge an APR of upto 28% on these small loans.

Buy now, pay later:

There are many companies that offer to split a purchase into smaller payments, on the lines of instalment loans, spread over several weeks or months. Therefore as a consumer, you don’t need to pay the entire amount in lump sum.

Companies offering buy now pay later schemes do not carry out a hard credit check and therefore approval is fast and easy compared to regular loans. Buy now pay later is a great source for urgent expenses. However do not carry out such multiple purchases, otherwise you may land into payment problems.

Cash advance apps:

Like in other walks of life, technology has also penetrated the financial service industry. Today there are many apps that help you borrow a few hundred dollars from your expected earnings.

In almost all cases, you are required to repay the borrowed sum on your next payday. These apps offer you the convenience of borrowing almost instant cash from the comfort of your home. Check out their charges or subscription fee before proceeding to borrow.

Online lenders:

There are many online lenders that offer your cash assistance even if you have poor credit score i.e. FICO scores less than 600. However in the absence of good credit score, they may seek additional information such as your employment status, ongoing debts etc. to check your eligibility.

But remember these lenders also operate much like no credit check loan lender and charge higher rates for bad credit loans.

Secured and Unsecured Bad Credit Personal Loans:

Personal loans are cheaper source of cash assistance and come in two forms i.e. secured personal loans and unsecured personal loans.

In case of secured personal loans, lenders ask you to provide something valuable as a guarantee against loan which is also called collateral. You can offer anything valuable such as your car, home, savings account etc as collateral for the money that you borrow.

In case of non payment of loan, lenders can repossess the collateral and therefore this type of loan is less risky for lenders. However since these loans are less risky, you also get favourable terms such as lower interest rate, less stringent qualification, better repayment terms etc.

On the other hand, lenders do not ask for any collateral for unsecured personal loans, making these loans more risky for lenders. Since these are considered risky loans, lenders charge higher rate of interest ask for more qualifying requirements.

Student loans for bad credit

If you are seeking no credit check loans to meet your higher education expenses, instead consider student loans for bad credit. While private student loans require good credit, federal student loans do not have such stringent requirements.

A bad credit borrower can borrow federal student loans that do not require credit checks. These loans also carry flexible repayment terms with benefits for working in public service.

Auto loans for bad credit

Auto loan for bad credit is another type of secured loan in which your vehicle is used as collateral for the loan that you borrow.

In case of default in payment, lenders have the right to repossess your car. However since a secured loan is less risky for lenders, you also get the benefit of lower interest rate, less focus on credit score and other flexible terms. However remember, if you have good credit score you will always get the better deal compared to the case if you have poor credit score.

Overall in any case, auto loans for bad credit are much better options than that of no credit check loans, provided you have a ready plan for repayment of loans as per mutually decided term.

Home Equity Loans for bad credit:

If you have adequate equity in your home, you can borrow home equity loan or home equity line of credit. Like any other collateral loans, in these cases your home works as the collateral for the loan borrowed. These are again a safe loan for lenders as they can repossess your home in case you fail to repay the loan

Most of the traditional lenders offering home equity loans or HELOCs look for good credit score. But you may look at hard money lenders who are quite flexible but expensive.

How your credit affects your loan?

Your credit score plays the most important role in the total cost of any loan that you borrow. For example if you have average credit score and wish to borrow a one year loan of $2,000 at an APR of 36%, which is more or less the highest rate for an affordable loan, you pay a monthly amount of $201.

However If you borrow the same amount of loan i.e. $2000 from a no credit check lender, you may be charged an APR of 200% and your monthly payment would be $396, almost double the amount that you pay for an affordable loan.

Therefore your APR depends on your credit score. You can find further details of the different in the following table for a sample loan of $2000 at different FICO scores.

Credit Check Vs. No Credit Check Loans

(Total Cost of Loan at Different FICO Scores)

Loan Amount: $2,000 Term: 12 Months

FICO score Example APR Monthly payments Total payments
Excellent (720 or higher) 11% $177 $2,121
Poor(629 or lower) 36% $201 $2,411
No-credit-check loan 200% $396 $4,746

Are there any safe no-credit-check loans?

You should borrow loan only as per your needs as well as your repayment ability. The prudent lending norms also suggests that lenders should assess the financial conditions of borrowers based on which any suitable amount of loan be given. This is done to ensure that the borrower does not fall in a debt cycle and is able to manage his finances well.

Therefore a no credit lender who evaluates your financial condition is a safer choice than that of a lender who offers no question asked no credit check loans.

There are many online lenders as well as loan apps that digitally assess your spending habits, deposits and withdrawals. They disqualify a potential borrower whose account shows multiple overdrafts.

Similarly there are many lenders that check your credit reports from credit bureaus in case you have low credit scores. These reports show your detailed lending transactions including borrowing of any payday loans, title loans etc.

These lenders ensure that you get a loan as per your current financial conditions, as indicated by your credit report. These loans are called safe no credit check loans.

On the other hand, a no question asked no credit check loan may prove to be quite costly and therefore cannot be called a safe no credit check loan.

How to choose the best no-credit-check loans?

You must remain careful while planning to borrow the best no credit check loans. Here are a few tips that can help you chose the loan that meets your cash needs the best:

Find out the actual APR: APR is the total cost of borrowing a loan. You can use the APR to compare different loans as well as its affordability. A loan with higher APR is less affordable than that of a loan with lower APR. The law also requires that all lenders disclose the APR.

Assessment of your repayment ability by lender: If a lender reviews your bank account information, checks alternative credit bureaus and asks you to provide proof of your income, it clearly indicates that your lender wants you to repay the loan.

On the other hand, a lender that offers your loans without checking your ability to repay the loan may not only charge you very high APR but also want you to come back for a new loan to pay the previous one.

Check the repayment terms: Irrespective of whether you agree to repay the loan in a week’s time or a month, you must note the repayment date.

You should also know how the lender would collect the money. If the lender directly debits your bank account on the scheduled date, you must have adequate money in your bank account on that date to avoid any Non-Sufficient Fund (NSF) charge.

Check the amortization schedule: This is a table that shows what portion of your each payment goes towards principal and how much to interest. The amortization schedule gives you a fair idea of the reduction in your principal loan amount.

Therefore check if your loan is fully amortizing, in the absence of which some of your initial payments may only go towards interest without actually reducing the principal loan amount that you borrowed.

Transact with registered lenders only: Most of the states today regulate lending business. The state laws require that each lender be registered with the concerned department of the state. A registered lender is expected to follow all prescribed lending norms which are quite helpful for borrowers.

Say no to scammers: No good and reputed lender would ask you for a fee or charge to process your loan application. If any lender asks you for a fee o gift cards to process your loan application, it is a clear sign scam. Beware of such scammers.

FAQ- Frequently Asked Questions

Lenders that offer no credit check loans do not check your credit score or credit history. They are mostly concerned with your ability to repay the loan and not necessarily with your employment status. As long as you can show proof of your ability to repay the loan, you can borrow no credit check loans even if you are unemployed.

No credit check loans gained importance because these are offered without any traditional credit evaluation process which accelerates the loan approval process. Therefore borrowers could avail these loans very fast in case of emergency.

These loans are mostly offered online in which you submit loan request form as well as your documents online. Lenders also assess your application, approve your loan request and transfer the actual money into your account online. Therefore borrowing same day no credit check loans is quite possible these days.

These same day loans are a great help when you need cash most urgently for needs such as to pay medical bills or carry out immediate vehicle and home repairs.

Lenders that offer no credit check loans usually do not consider your credit score or credit history to offer you a loan. Usually they do not fetch your credit report from credit bureaus to assess your eligibility for the loan. In most cases these lenders offer you loan on the basis of your ability to repay the loan.

Therefore if you do not repay the loan in time, your credit score should not be impacted. But if a lender chooses to report your late payment details to the credit bureau, it may impact your credit score.

On the other hand, your delayed payment would definitely result in late payment fee and charges which would enhance the total cost of borrowing the loan for you. Therefore you should always borrow only as much as you can repay.

You should also have a ready financial plan to repay the loan in time to manage your finances efficiently.

Yes, you need to provide certain basic documents to apply for no credit check loans. The government issued ID and proof of your income are two most important documents that you need to provide.

Since lenders offer no credit check loans, they do not check your credit reports and so do not know you financial condition. Therefore they rely on your proof of income to check whether you have the ability to repay the loan or not. Your proof of income assures the lenders that you can borrow a certain amount of money and can also repay the same in time.

Now that you know all about no credit check loans, what next?

Before you set out to borrow a no credit check loan, make sure that you have calculated your cash needs and have made a plan to repay it in time. Borrowing money just because it is available or borrowing more money than what you need may land you into deep financial trouble.

Next, you explore all borrowing options including assistance from credit unions.

If borrowing no credit check loan is the only option that you have, prequalify yourself to compare the rates, fee and terms from different lenders. This will help you choose a registered lender that offers no credit check loans with best terms in terms of optimum loan amount, low APR, suitable term, least possible charges etc.

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