If you’re struggling to rebuild your credit after a financial setback, you’re not alone. One report shows that 53% of Americans have been turned down for a loan, car, or credit card due to poor credit.
This situation can be frustrating, especially in the event of an emergency. If you need access to quick cash to cover a home repair, car problem, or any other type of personal expense, consider applying for a no credit check loan.
These loans allow you to apply for funding without the stressful process of a credit check. Lenders who offer them will use other forms of data to review and approve your loan. Today, we’re sharing how they work and the top options for 2023.
A no credit check loan is exactly what it sounds like. This is a type of personal loan that doesn’t take your credit score or credit history into account.
These loans are usually smaller in size, capping out at around a few thousand dollars. You can use them to cover an emergency expense or bridge an income gap if you’re between jobs. While the process is convenient and fast, the main drawback is that the loan will usually carry higher interest rates and shorter repayment timelines than other loan options.
If you have poor credit or shaky credit history, no credit check loan options can be especially appealing. While some lenders won’t look at your credit at all, others will perform a soft check that doesn’t impact your credit score. Either way, they will not require a hard FICO score credit check when reviewing your application.
If a lender doesn’t check your credit, how can they verify that you’re likely to repay your loan on time? To assess your creditworthiness, they’ll usually look at the following factors during the application review process:
These details can give them a clearer picture of what your earnings are like, so they can assess your ability to commit to the terms of a no credit check loan. Some lenders may also require you to supply a form of collateral before they can approve your application.
Once you know how to get a loan without a credit check, it’s time to start looking into your various options. Here are the top ones to consider for 2023.
A payday loan is a small, short-term loan that you’ll pay back the next time your employer pays you. In the interim, you’ll supply your lender with a personal check for the loan amount, or give them access to your bank account.
Most payday loans come with a two-week timeline, and they’re due on the day that you get paid. At that time, the lender will either cash the check or take the funds out of your account, all in one lump sum.
If you need cash to hold you over until your next pay period, this is an option to look into. However, keep in mind that payday loans tend to have higher annual percentage rates (APR) and shorter repayment terms than others.
Many types of personal loans are unsecured. This means that you do not have to put up any type of collateral to obtain them, though lenders will often raise their rates and fees to incentivize you to meet the terms.
Car title loans work a little differently.
With this type of secured loan, you’ll give the lender your car title to hold while you’re paying the money back. This motivates you to pay on time and in full. If you don’t, the lender has the right to take your vehicle.
The loan amount you qualify for will correlate directly with how much your car is worth. Most lenders will let you borrow between 25% and 50% of the value of your title. While you may be able to drive your car during the loan repayment period, it’s important to verify that detail before signing a contract.
An installment loan is one that you pay back over a pre-determined period of time by making set monthly payments. These typically come with higher borrowing amounts, so if you need more money than a payday loan or car title loan will provide, they can be good alternatives.
You can usually use a no credit check installment loan to cover a range of expenses, from household repairs to dental work. They may come with lower interest rates and longer repayment terms than other options. An advantage of going this route is that it’s easier to manage your budget when you pay the money back on a gradual basis, rather than all at once (as in a payday loan).
If you belong to a credit union, you may be able to apply for a PAL if you need quick cash. These loans work similarly to a personal installment in that you’ll pay them down on a monthly basis, rather than over a single pay period.
While they can be good in a pinch, PALs often come with high interest rates that are capped at an APR of 28%. One aspect to keep in mind is that the lender will look at your credit score, but a low score won’t disqualify you. As PALs are designed specifically for applicants with low credit scores, lenders will look mostly at your income and your ability to repay to determine if you qualify.
Getting a loan without a credit check doesn’t have to be complicated. If you know where to look, it’s relatively easy to find lenders who are willing to look beyond your FICO score when reviewing your application.
As long as you’re willing to pay higher interest rates and you can repay the loan by the deadline listed in your terms, a no credit check loan can put money in your pocket as soon as the next business day. These can be lifesavers in the event of a financial emergency.
When you’re ready to apply for one, start with us. Our online form makes it easy to connect with trusted lenders who offer the money you need, without the credit inquiry you don’t. Get started today and let us know if you have any questions!