In 2018, U.S. consumers borrowed almost $90 million dollars by taking out short term loans, according to the U.S. Comptroller of the Currency.
Short term loans are those typically paid off within 6 to 18 months.
Payday loans and loans no credit are two of these types of short term loans.
Keep reading to learn more about loans having no hard credit check required.
Are Loans No Credit Check Available?
Companies offering personal installment loans allow people to borrow money with only a soft credit check being performed. A soft credit check is one that doesn’t hurt your credit score.
These personal installment loans are a type of short-term loan. These loans typically allow someone to borrow between $1,000 and $15,000 dollars.
When someone takes out a personal installment loan, they are given cash in the lump sum amount of the loan which they have to repay with interest at particular intervals over a designated period of time.
Below are a few things that set these types of loans apart from more traditional loans.
No Collateral Required
Personal installment loans do not require collateral. Collateral is personal property that is put up to secure a loan and is defaulted if the borrower doesn’t pay their loan on time.
Because the loan requires no collateral providing the lender with security the borrower will pay, personal installment loans may have higher interest rates than other short term or traditional loans.
Approval Based on Ability to Pay
As mentioned above, a soft credit check is performed prior to approving a personal installment loan. However, approval for the loan is based more on the ability to pay than your credit score or credit history.
The lender will take other factors into account more heavily. Such as work history, income level, and financial status.
Cannot Have Other Outstanding Personal Loans
Because the lenders base the approval of no credit check loans on the borrower’s ability to pay, they do not allow borrowers to have more than one personal loan at a time. If they did so, they would seriously jeopardize the borrower’s ability to repay both one or both of these loans.
For example, if they determine someone has $250 dollars in available funds to repay their loan each installment period, then the borrower took out another loan with payments of $150 during the same period, the borrower would be short on cash to repay.
More Frequent Payments
Traditional long term loans allow for a longer period in between installment payments. The payments could be expected to be made every month, six months, or even as a balloon payment at the end.
Loans with no credit check, such as the personal installment loan, may require payments every week or every day, depending on the amount and length of the loan. By doing so, they help keep the borrower on track for repaying their loan on time.
The downside for the borrower is that it may be hard to make these more frequent payments on time.
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Whether you are in need of $1,000 or $15,000, we can find the perfect loan for your repayment needs.
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