Loans Without Credit Check: Loan Options and Alternatives


No matter how urgent your need for quick cash, think twice before getting a no credit check loan. Why? Because they’re potentially as predatory as payday loans or car loans, and can keep you trapped in a debt cycle for years.

These loans – also known as no credit checks – Come with rates in excess of 400% in some cases, well above the rates you can find at credit unions or online lenders.

Before you take out any loans, consider other options and learn how these loans can put your finances at risk.

When you need quick cash, you might find it through discussions with credit counselors, religious organizations and .

But low credit may not get in the way if you want to borrow from a lender with affordable rates and responsible underwriting practices.

Here are other loan options for borrowers with poor credit ratings (629 or lower FICO).

Most offer small personal loans starting at $ 500, and they may consider information other than your creditworthiness, such as your history as a member, to qualify you for a loan. Many also have starter credit cards or loans to help you build a credit history. The interest rate of federal credit unions is capped at 18%.

Known as , These credit union-issued loans help small dollar borrowers avoid the debt trap created by traditional payday loans. The effective annual interest rate on these loans is limited to 28%.

Some online lenders consider borrowers with poor credit scores, even those with scores below 600. have higher interest rates, but lenders check other data, such as employment status and outstanding debt, to help you qualify.

Unlike lenders who check your credit report to see how you’ve dealt with debt in the past, a no credit check lender will offer you money without making sure you will be able to repay it.

No credit check loans can come from online or storefront lenders who promise a simple application process and quick delivery of funds. The loan amounts range from 100 to several thousand dollars and are usually repaid in equal, fixed installments over months or years, sometimes with add-ons such as or fees that add to the cost of borrowing.

Some of these lenders require access to customers’ bank accounts and automatically withdraw funds on the due date.

If a lender charges 200% APR on a one-year loan of $ 2,000, you pay $ 396 every month. The same loan would have monthly payments of $ 201 with an APR of 36% – the highest interest rate an affordable loan can have, according to most consumer advocates.

An no credit check lender who checks some of your financial information is a safer choice than a no-questions-asked lender.

For example, there are some online lenders who check an applicant’s bank account to assess their spending habits, deposits and withdrawals. An account that has multiple overdrafts can disqualify an applicant.

Other lenders review reports from alternative credit reporting agencies that collect information about consumers with low credit scores. For example, these reports can show whether you received a payday or title loan.

These lenders charge high interest rates because it is riskier to loan out without doing credit checks, but trying to assess your ability to repay a loan will help you avoid falling into a debt trap.

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