Personal loans are a type of borrowing that allows individuals to get money for different personal needs. One common thing that most lenders consider when reviewing a personal loan application is a borrower’s credit history. That is why people with bad credit scores or no credit history can find it challenging to get approved for a personal loan. But luckily, personal loans with no credit check can offer a reasonable alternative.
What Are No Credit Check Loans?
No credit check loans are a form of financial aid that excludes a hard credit check from the loan process. This means that a lender won’t make screening through three major credit bureaus to estimate your creditworthiness. Instead, it makes a loan decision based on your income, employment status, and debt-to-income ratio. No credit check loans can be a great solution for people with questionable credit backgrounds or no credit at all.
Things to Know About Personal Loans with No Credit Check
No credit check personal loans seem to work almost like regular personal loans. However, they have a few key traits that borrowers need to understand before applying. Here are some things to know:
Higher interest rates. No credit check lenders don’t check your credit and financial history. This way, they see you as a potentially high-risk borrower. As a result, they may charge a higher interest rate to offset the risk associated with bad credit, such as late payments or defaults.
Smaller loan amounts. Most lenders who offer personal loans with no credit check usually offer loan amounts that are limited to $5,000.
Shorter loan terms. Lenders may also offer shorter repayment terms for no credit check loans. This means that you may be asked to repay the loan within 2 to 24 months. Some forms of loans with no credit check can even come with terms of up to 31 days.
Soft credit checks are still performed. Although many lenders state they provide loans with no credit check, it’s usually a trick. They still use alternative sources to check your income, review your credit history and estimate whether you’re worth dealing with.
No collateral is required. Most no credit check loans are typically unsecured. This means that you can get the money without providing any repayment guarantee. At the same time, a lender may charge higher interest rates to prevent losses.
Potentially risky options. Sometimes no credit check loans can catch you in a debt trap due to their hefty interest rates and short repayment terms. Thus, you should turn to them only if you have a practical repayment plan. Make sure your loan payments are within your means before applying.
What Lenders Offer No Credit Check Personal Loans?
A no credit check loan can be obtained from online lenders and private lending companies. Conventions financial institutions like banks and credit unions usually perform credit checks for any lending options they provide. When choosing a lender, make sure it has a license and is allowed to operate in your state.
How to Apply for No Credit Check Personal Loans?
The process is usually relatively simple. Here are the steps to take:
- Compare lenders. Do your online research and compare several offers. Choose those with lower interest rates, flexible terms, and good reputations.
- Check eligibility requirements. Once you have a list of potential lenders, check their eligibility requirements to make sure you can meet them. Most lenders will require proof of income, a valid ID, and a bank account.
- Complete a loan application. After you find a lender with both suitable loan terms and easy-to-meet requirements, apply for a loan by filling out a loan request form. Some lenders can offer a completely online process, while others will require you to visit a store to provide documents and sign a loan agreement.
- Receive the funds. If approved, sign an agreement to accept an offer. After all, the lender will deposit money into your checking account. It usually takes from several hours to several days.
What Are Available Alternatives?
If a personal loan with no credit check doesn’t meet your needs, there are a few alternatives you can consider. Here are some options:
Secured Loans
If you have some property to use as collateral, for example, a car or a home, you can consider taking out a secured loan. They typically come with lower interest rates and are also available to people with less-than-ideal credit scores. This is because the lender has some security in case you default.
Joint Loans
Another option is to ask someone with good credit to join your loan application. This way, the lender can base its decision on the co-signer’s creditworthiness. This can increase your chances of getting approved, even if your credit score or income leaves much to be desired.
Borrowing from Family/Friends
When you ask your loved ones for help, you can save money on interest and get more flexible repayment terms. However, it can also result in broken relationships if you won’t pay the money back on time.
Does Rockland Savings Bank Offer Personal Loans with No Credit Check?
At Rockland Savings Bank, we offer a wide range of loan products to our customers. However, personal loans with no credit check are not among them. Like most traditional lenders, Rockland Savings Bank uses applicants’ credit scores and histories to determine whether to approve their loan applications. But don’t worry! We have several options for people with less-than-ideal credit that will help you get back on track. Contact us to learn more about what we can offer you today!