Personal Loans with No Credit Check - Here's Your Options
Everyone has their own reasons for needing to borrow and secure a personal loan. Unfortunately, consumers with less than stellar credit histories may find it difficult to get approved. Nonetheless, there are still several options available, and many don’t require a credit check. Keep reading to learn all about no-credit-check personal loans and how to secure one without paying an arm and a leg.
A traditional lender will offer the best rates and terms, so start off by trying to find one willing to provide a personal loan without a credit check. Not all banks or lenders are in the habit of doing this, but it can’t hurt to call up and check with the banks in your area.
If you do find traditional lenders willing to work with you and offer a personal loan without a credit check, compare their interest rates. While a personal loan with a 12 percent interest rate may seem high, chances are it will pale in comparison with the often exorbitant rates on cash advances and payday or title loans. A lower interest rate will save you money over the term of the loan.
In addition to interest rates, you should also evaluate the loan origination fees. Many lenders who offer personal loans without credit checks charge a substantial loan origination fee to compensate for the added risk of the loan. These fees are often incorporated into the monthly payments.
If you’re unable to find a traditional lender offering personal loans no credit check without outrageous interest rates or fees, consider micro lenders. Also called peer-to-peer or P2P lenders, micro lending services, such as Lending Club, Prosper, and Kiva, may be able to help you with personal loans up to $35,000.
Although many micro lenders do perform credit checks, they’re used only to determine interest rates, not whether or not you’re approved for a loan. If you are approved, private lenders will be able to view your profile and fund your loan if they choose. If so, in most cases the funds will be available in less than 24 hours. Depending on your credit score, your interest rate can range from 6-30 percent.
Payday or Cash Advance Loans
Payday and cash advance loans are short-term loans for small amounts from $100-$1,500 that are designed to help with financial emergencies. Unlike other loans, they’re tied to your next paycheck and are meant to be paid off in full within a week, two weeks, or a month’s time.
An Internet search for payday or cash advance loans will provide you with several options to choose from. When accepting a loan, you’ll need to provide your bank account and routing numbers. On the due date, the amount borrowed will be automatically deducted from your bank account.
While these types of loans are an easy source of immediate funds for any employed person, the fees associated with them can be quite substantial. In fact, for every $100 borrowed, you can expect to pay anywhere from $15 to $40. That being said, it may be less expensive than having your utilities turned off, paying a credit card late, or bouncing a check.
People everywhere fall on hard times every now and then, so it’s not surprising to find several payday and cash advance lenders soliciting their services. After all, with fees ranging from 15 to 40 percent, there’s money to be made from helping people in need.
Unfortunately, not all payday and cash advance lenders are honorable, scrupulous, and worth doing business with, so here are some questions to ask to find the right one:
• Are they a direct or third-party lender? – Some lenders may seem to offer loans directly, but turn out to be third-party lenders who simply refer you to direct lenders. With third-party lenders, you have no idea who is receiving your personal information, if the transmission lines are secure, and whether or not they resell personal information.
• What is the interest rate? – The interest rates will vary and come in the form of a sliding scale based on the term of your loan or a simple flat fee.
• What is the maximum loan term? – Some payday and cash advance loan terms don’t exceed 10 days, while others can last for up to six months. However, the longer the loan, the more it will cost you.
• What is the maximum loan amount? – While they often advertise much higher numbers, the average online payday or cash advance loan provider offers loans ranging from $100-$1,500.
When you have researched potential lenders and found a suitable one, fill in the online forms and provide the requested documentation. Before making a lending decision, they will want the following information:
• Proof of employment
• Net monthly take-home pay
• Driver’s license
• Social security number
• Checking account number
Although credit checks are not used to determine whether or not you will qualify for a payday or cash advance loan, they may be used to help determine your interest rate. If approved, most lenders will directly deposit the funds in your checking account with 24 hours.
Never give out your personal information until you have thoroughly vetted the company. In addition to online reviews, you can check with your state’s attorney general’s office or the Better Business Bureau to help verify their legitimacy.
Pawn Shop Loans
If you have jewelry, electronics, musical equipment, artwork, or anything else of value, you can take it to a local pawn shop and receive cash approximate to its value. The items you bring in will be held for a predetermined amount of time, and if the loan isn’t paid off by the deadline, they will keep it and sell it.
A pawn shop loan can be a valuable funding alternative for many people. However, make sure you can live without the item in case you’re unable to pay up.
Auto Title Loans
With an auto title loan, you exchange your car’s title for cash. Many times, you’ll be required to hand over a set of the car’s keys as well. If you’re unable to pay back the loan, you forfeit ownership of your car. The rates on auto title loans are similar to payday loan rates. However, since your car’s title is being used as collateral, you can often receive much larger loan amounts with longer repayment terms.
To find auto title loan lenders in your area, a simple Internet search will likely reveal several. After you have researched and selected a lender, you will be asked to provide your personal information as well as the make, model, mileage, and value of your vehicle. You’ll also be asked about your financial situation, and lastly, how you would like to receive your money.
After receiving the loan, it’s important to pay it off as soon as possible. Not only do the interest rates rack up over time, but you’ll risk losing your vehicle if you’re unable to pay it off by the repayment deadline.
No-Credit-Check Personal Loan Tips
Obtain a Copy of Your Credit Score and Report
Before making the decision to go with a personal loan without a credit check, check your credit score to see if you may be eligible for a less costly conventional loan. Your credit score can be obtained from each credit bureau: Experian, Equifax, and TransUnion. You can also now get them from Credit Karma and other third-party sites.
While you’re at it, make sure to check your credit report for any errors, which may be affecting your score. Fixing these errors might raise your score rather quickly and help you qualify for a conventional loan, which in addition to proof of income, usually requires a credit score of 620 and above.
Calculate Your Assets
Many no-credit-check personal loans require collateral assets, such as your car, home, jewelry, artwork, or other valuables that can be sold in the event you’re unable to repay the loan. Therefore, take some time to type up a list of your assets as well as the sources of your personal income.
Also make some copies of last year’s tax return. Having this information ready to present to potential lenders may boost your odds of qualifying and/or lower your interest rates.
Ask About Self-Employment Requirements
Many lenders provide self-employed individuals who are able to prove their income with more favorable loan terms. To qualify, you should prepare to provide your tax returns or other proof of income over the last three years.
Personal loans no credit check may be tougher to find and have higher interest rates and fees, but there are still several options available if you have a poor credit score and need cash fast. A personal loan from a traditional lender should be your first option. However, if you’re unable to find a conventional lender offering no-credit-check personal loans, then micro loans, pawnshop loans, payday loans, and auto title loans may be a viable option.