Bad credit is a ghoul that can haunt you for years. Whether you’re trying to start a business or just pay your bills, bad credit can be a huge obstacle to get around.
Over 68 million Americans have bad credit. If you’re one of them, you may have already tried and failed to secure loans from a bank. You could try and spring for a high interest, short-term loan, but that could leave you in more trouble than you’re already in.
That’s where no credit check loans can come in. Such loans can be a blessing for those with bad credit. Applying for one doesn’t hurt your credit, and they offer more manageable payments than other kinds of loans.
Read on, and we’ll walk you through everything you need to know about no credit check loans.
What Are No Credit Check Loans?
The answer is in the name. No credit check loans are funds that are granted by a lender without requiring a credit score check.
There many reasons one might require such a loan. The borrower may want to avoid a credit inquiry from appearing on their credit history. They also may believe that given their credit history, their odds of securing a loan through traditional means are low.
No credit check loans are an efficient way to get fast cash. The application process is usually simple and quick. Applications are usually filled out in person or online, and require the borrower’s bank information. Funds are usually transferred straight to the borrower’s account within a day’s time.
Soft Credit Inquiries
Lenders of no credit check loans still do have an approval process, it just doesn’t involve a formal credit check. A soft credit inquiry does not affect a person’s credit score, and the inquiry will not be visible to other lenders.
What’s the difference? A hard inquiry usually affects one’s credit score because it is done at the borrower’s request. It implies that the borrower is about to receive a new loan, and therefore build up more debt.
A soft inquiry, on the other hand, doesn’t require a borrower’s approval. If you’ve ever received offers of “pre-approved” credit cards, these are usually as a result of soft inquiries.
In this way, no credit check loans can still look into your history and approve you. But they can do so without triggering an alarm from other lenders. You should always ask your loaner about the details of their approval process. You can use this helpful site to help find a lender that works for you.
Benefits of No Credit Check Loans
Loans with no credit checks have a number of benefits over other types of loans. For one, you can borrow much higher amounts of money.
Most states in the U.S. have strict limits on how much a borrower can accept at one time on a short-payment loan. These limits can keep dollar amounts below even $1,000. If you have a larger financial situation, these limits can be a big problem.
No credit check loans have no such limits. The amount that you can get approved for will vary by lender. But the added benefit of no credit check loans is that you can apply and find how much you’re approved for all in one swoop. All without fear of a credit dip.
A no credit check loan also comes with a lower APR (annual percentage rate) than other kinds of loans. Because standard short-term loans are, well, short-term, the APRs can be incredibly high. These rates are decided for a year’s worth of time, and so a short-term loan gets saddled with an unreasonable rate.
No credit check loans will still have a relatively high interest rate. But they’re much, much more reasonable than standard payday loans, where APRs can be as high as 400 percent.
The flexibility of no credit check loans also means you can apply and receive money when you need it. Unlike banks with set hours and specific locations, many alternative loan providers are much more flexible in how and when they’ll receive clients.
More Manageable Payments
One of the biggest advantages of a no credit check loan is the manageable payment size. It can be difficult to try and pay back hundreds and hundreds of dollars over a one or two week period. If you were that liquid with cash, you’d probably not need a loan to begin with.
Lenders of no credit check loans understand this. Even though they have larger loan amounts, they still include more extended payment terms and lower APRs. That means borrowers have less pressure to pay back their loan immediately.
Installment loans also have the benefit of amortizing interest. That means every payment you make goes towards the principal loan but also goes towards paying off incurred interest as well. This is a much better situation than what you get with a short-term loan, where interest is treated as a flat fee.
Amortization means if you are able to pay off the loan early, you’ll actually decrease some of the money that you’d owe in interest. Most installment loans are amortizing, but you should always check with your lender to make sure.
You should also make sure that there are no prepayment penalties that you might accidentally incur.
Get the Cash You Need Right Away
Financial times are tough for many Americans. Bills pile up, emergencies happen, and many families are left without a place to turn to. No credit check loans can be a real lifesaver in such situations, as they offer fast cash without a lengthy or difficult approval process.
For more financial advice, tips, and tricks, check out our blog.
Author: Cathy Carter
