The average credit score in America for 2019 is 703. While this score is considered “average,” the truth is that not many people in need of financial help have scores this high. If you need funds and your score isn’t around the average, you will probably need “no credit check loan” options.
What Are No Credit Check Loans?
Quick loans are offered to people with poor credit or no credit. They tend to carry higher interest rates because they are considered risky.
Applying for a no credit check loan will only result in a soft-pull on your credit. The credit score is available for the lender, but it plays a far less important role in the loan decision than for a standard installment loan. The soft credit check will show the lender how much debt you currently have.
No credit check loan lenders look at your full financial and personal picture, like:
What Are Your Monthly Wages?
The lender will need to know that you will be able to make payments on the loan as agreed. No credit check loans may be a little less stringent about income type, however, and may count part-time jobs and self-employment work as income.
What Is Your Debt-To-Income Ratio?
How much debt do you already have? Lenders need to know that you can afford to take out a new loan and you will not default on it.
The debt-to-income ratio shows lenders how you handle the credit that you already have.
Do You Have Steady Employment?
A steady job for more than a year or two signals “responsibility.” An applicant who has no proof of steady employment will find even no credit check loans hard to get.
How Long Have You Lived at Your Address?
This question, along with the length of time at your job and your highest level of education, help the lender to classify you as a borrower.
Some lenders may also consider your highest level of education and your age in addition to the above factors.
Is a No Credit Check Loan the Same as a Payday Loan?
A payday loan is only one type of a no credit check loan. Other no credit check loan options are similar to installment loans. If you don’t want to go the payday loan route, you can consider applying for a cash loan no credit check from other sources:
If you have an account with a credit union, you may be eligible for a no credit check loan.
Even if you aren’t a credit union member, your bank may be willing to work with you. Instead of using your credit score to approve or deny you, your bank or credit union will be able to look at your whole financial picture.
Most often when you search online loans, you will be directed to a broker site that sends your information to multiple lenders at once. These sites send you more than one offer to make sure you can find the best loan offer for your situation.
Be aware that while these loan brokers don’t perform a hard credit pull, each bank contacted by the broker may submit a hard pull. Find an individual lender that offers no credit check loans.
With secured loans, lenders will ask for some type of collateral, like a car or truck. Secured loans aren’t considered to be as risky to lenders because if you default, they can take your property and sell it to help cover losses.
Remember when you are applying for a secured loan that you are agreeing that the lender can take your collateral outright. Make sure you stay compliant with the terms of these loans.
If your credit isn’t in the best shape, you may consider getting a cosigner with good credit to sign on to the loan with you. Your credit will improve as long as the payments are made on time. Lenders may not be as concerned about checking your credit as long as your primary signer has good enough credit to “carry you both” and you aren’t requesting unreasonable amounts of money.
A Quick Note About Payday Loans
Payday loans no credit check are a handy resource to use if you will be able to pay it back within the allotted time. They are best for short term, emergency loans.
Keep in mind that payday loans online can offer interest upwards of 350% or more, along with hefty fees and charges. A payday loan requires no credit checks, making it an appealing option. Payday loans are notorious for having very unfriendly terms, however, and if you cannot pay it back in a short amount of time you will quickly lose control of the debt.
Payday loans can still be an excellent choice for dealing with an emergency quickly. They are not intended for an income boost or to pay monthly bills.
Five Signs You May Need No Credit Check Loan Options
There are many reasons you may need no credit check loan options. If you are in a situation like any of the following, this may be your perfect solution.
1. Your Credit Is Too Bad to Qualify for a Conventional Installment Loan
Your credit report may disqualify you from many installment loans. Your low score may also mean that you are being offered high-interest rates.
Your score isn’t the only thing lenders look at. They check out how many credit cards you have, what their limits are, and what percentage of available credit you have used on each card. They also look at what percentage of your total credit limit you are using as a whole.
If you have been applying for a mortgage, auto financing, credit cards or loans, you will have multiple “hits” on your credit report. Your credit pulls hurt you in the short term by knocking your score down several points for each hit. In the longer term, lenders see the number of pulls you have on your report and may consider you a “high risk.”
While your score will rebound from the pulls fairly quickly, the number of pulls in a short time can affect your credit for over a year.
2. You Have No Credit
The biggest catch .22 in the world of financing: how do you get credit if you can’t get credit because you have no credit? You need no credit check loan options to help you build your credit through timely payments.
Remember that no credit check loans consider your entire financial picture, not just your score (or lack of score).
3. You Need Money Fast
No credit check loans tend to be approved much faster than conventional loans. These loans have a more streamlined process without lengthy underwriting. These are the loans you see that promise you funds in as little as three days. No credit check loans generally only want to see some pay stubs along with your application and a bank statement or two.
From there, you can have your money anywhere from the next day up to a week. No credit check loans are popular choices for someone who needs cash fast for an emergency.
4. You Can Pay It Back Quickly
No Credit check personal loans will have higher interest rates than conventional loans. You are best matched with a no credit check loan if you can pay it back quickly.
Always pay more than the minimum payment when repaying your no credit check loan to avoid interest accrual.
5. You Can’t Risk Another Credit Pull on Your Report
There are many reasons you may want to avoid a “hard pull” on your credit report. You may have three or four pulls the past six months or ten pulls in a year. Each hit is a warning for a lender that you may be a high credit risk.
Pulls can indicate that you have another account with additional debt that isn’t showing on your report yet. Even worse, your applications may have been denied for each pull, meaning that other lenders thought you were a high-risk, too.
Your score could be hovering between fair and good. A hard pull can knock you down enough points to ruin your chances for a good mortgage or automobile financing rate.
Some of the credit reporting agencies claim that a cluster of similar hard pulls within a short time, such as from mortgage lenders, will only count as one. This depends on how the banks and lenders are classified on the report. Applying for multiple mortgage rates can devastate your score for a year or more.
No Credit Check Loans May Be the Answer for Your Situation
You may find yourself in a situation where you need money, quickly. You may find that that you cannot qualify for a traditional loan or that you don’t have the time for the lengthy approval process.
Contact Bonsai Finance today and let us show you how we can help you fix your credit while getting the money you deserve when you need no credit check loan options.