PERSONAL FINANCE BLOG

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No Credit Check Personal Loans
15 May 2019

The Pros and Cons of No Credit Check Personal Loans

You’re struggling.

Bills are pelting you like drops of hail. You’re afraid to look at your credit score.

When you’re stuck in this spot, no credit check personal loans can be your lifesaver. However, they’re not a perfect solution.

Here are a few things you should consider.

Benefits of No Credit Check Personal Loans

The biggest benefit of a no credit check loan is also the most obvious. You can secure money even if you don’t fit the typical borrower profile.

When you desperately need money, you’re sometimes pushed into doing things that you don’t want to do. Getting a high-interest loan from a reputable source can free you from temptation.

Reasons to Borrow Money

So who should look into a no credit check loan? People who are in an emergency situation. Your car needs a new radiator,  your insurance won’t cover part of your child’s medication, you unexpectedly lose your rent money.

When these situations occur, you’re thrust into a very difficult position. It’s easier for people who have good credit scores. They have more options.

Before you sign the dotted line on your loan, think very carefully about what you’re doing. You’re entering an agreement that will be hard to break. If you really do need the money, try to speak to multiple new lenders.

You may only be able to find one or two who are willing to work with you because of your credit score. It’s still worth it to try, however.

Reasons not to Borrow Money

Money is a constant need, an eternal motivator. However, simply feeling pinched isn’t enough of a reason to put yourself into debt. If you could survive without borrowing money, you probably shouldn’t do it.

Why? Because it complicates your finances. If you’re already having money troubles, adding an extra bill to your plate isn’t going to help anything.

Let’s say you’ve been dreaming of going to your friend’s destination wedding. Should you take out a loan to attend? The answer depends on your financial health.

If your finances are a wreck, you should probably skip the wedding. If they’re not, and you believe that you’ll be able to easily repay the amount, you can at least consider it.

Still, most financial advisers would tell you never to go into debt to attend entertainment events.

Benefits

No credit check personal loans are a special type of loan. They’re intended for people who would normally be blocked from getting credit. These are some of the benefits.

Flexibility

Your life is more flexible if you’re not behind on your bills. Otherwise, you might have to start making tough sacrifices, like restricting yourself to ramen noodles and water.

No credit check loans usually pay very quickly. You can often receive the funds within minutes if you apply in person.

In an emergency situation, this is invaluable.

Stress Relief

No one can help being stressed out when they’re facing a mountain of bills they can’t pay. Taking care of the bill is like taking a load off of your back. You’ll finally be able to breathe.

Options

Having money gives you options. Instead of worrying about whose couch you’re going to crash on, you can pay your rent and figure out your next step in comfort.

Disadvantages of No Credit Check Personal Loans

A loan isn’t free money. You’ll have to repay everything that you borrow. That’s why you need to be so careful about avoiding borrowing money that you don’t need.

One of the disadvantages particularly associated with no credit check loans is the very high interest rate. That’s one of the ways that the lender reduces the risk and ensures that they still make money.

Another disadvantage is that the amount you can be approved for is often lower than with traditional loans. This is not the route to go if you’re trying to borrow $10,000.

If you need $500 or less, however, there are no credit check loan lenders who might be willing to work with you.

You still have to demonstrate that you’re credit-worthy.

Loan Requirements

In order to apply for most personal loans, you need to be a legal adult with I.D. and you need to have a job or private income. You’ll have to be able to prove your income with paystubs, bank statements, etc.

If you can’t prove that you’re reliably paid, you won’t be able to get a loan. You also need to make at least $1,600 a month.

This could be a problem for freelancers and people who get paid under the table. Many people in the gig economy skip paying their taxes.

Loan Application

You can apply for no credit check loans online or in person. The process is actually faster in person because the attendant can hand you the money immediately after your application is approved.

If you apply online, you have to wait until your supporting documents are approved. This could happen instantly or it could take days. Many online lenders promote loan reimbursements within 24 hours.

In both cases, the application process is similar. It usually takes less than a few minutes to complete. You simply need to enter information about your address, your job and income, and how much money you want.

The lender might approve you for a lower sum than you were looking for. You can take the money anyway and apply for a different loan somewhere else, or you can abandon the project.

Repaying the Loan

In one sense, a disadvantage of your no credit check loan is that you’ll have to repay it. The extra monthly or bi-weekly bill certainly won’t make your life more fun.

However, you can’t ignore your debt unless you want your credit score to crumble even further.

Fix Your Finances

If you’re looking into no credit check personal loans, it’s a sign that your finances could be in better order. Don’t worry. The situation isn’t hopeless no matter how bad it seems.

The first thing you need to do if you want to escape your situation is to get educated. That’s where we can help. Our blog is designed to provide topical and useful financial information.

Keep reading our site if you want to stay informed.