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No Credit Check Loans | How to Apply Online

Lorraine Roberte

Lorraine is a south Florida-based personal finance and digital marketing freelance writer who drafts content for businesses and startups that gets attention on social media and visibility on search engines. She has published on prestigious sites such as Thrive Global, Elephant Journal, Red Tricycle and Tweak Your Biz.

Low credit scores can make it hard to get traditional personal loans with banks. This is true even for scores as high as 699. So what’s a person to do? Online no-credit-check loans might be an option for those with rocky credit scores, but they’re not right for everyone. Read on to discover if this is the loan for you and the other types of loans to consider.

What Are No-Credit-Check Loans?

A common type of no-credit-check loan is a payday loan, though there are others like title, personal installment, and pawn-shop loans. Just as the name implies, no-credit-check loans are loans where lenders don’t make a hard inquiry into your credit. This means they don’t pull your credit report to look at your credit scores and history, like most banks and traditional lenders do, when giving out loans. Instead, no-credit-check loan lenders judge your ability to repay loans on other factors.

What’s Wrong With No-Credit-Check Loans?

No-credit-check loans can bring the money required to finance a needed purchase or pay for an emergency expense. They are especially worthy of consideration for people with credit scores below 600, limited credit profiles, or recent personal loan denials with traditional banks.

That said, no-check-credit loans come with astronomically higher interest rates when compared to loans requiring credit inquiries. Payday loans, for instance, have an average interest rate of nearly 400 percent APR.

For smaller amounts and shorter loan terms, this amounts to only a $60 fee on a two-week, $400 loan. But a two-year, $2,000 loan with a 200 percent APR costs over $6,200 in interest. It also brings your monthly payments up from a manageable $118 on a standard loan with a 36 percent interest rate to $342 with a no-credit-check loan.

That’s why it’s essential for consumers to carefully consider no-credit-check loan terms before signing any contract and to judge their ability to repay the loan based on current life circumstances. For those who can borrow smaller amounts and pay off loans quickly, no-credit-check loans can be a solution for poor-credit borrowers.

What To Look for in No-Credit-Check Loans

No-credit-check loans are legitimate, but they often attract scammers and subject unsuspecting people to predatory practices. Because of this, it’s especially important to look for certain features to ensure your lender is credible, including:

  • Contracts with clearly laid out terms and conditions
  • Transparent fees that are spelled out in a straightforward manner
  • Positive online lender reviews from various websites and third-party agencies like the Better Business Bureau (BBB)
  • Lenders who assess your ability to repay loans, especially on higher loan amounts
  • Lenders who don’t use high-pressure sale tactics

Who Can Apply For No-Credit-Check Loans Online?

In addition to being 18 years or older, you’ll need a few key requirements to apply for a no-credit-check loan, such as a:

  • U.S. government- or state-issued photo I.D.
  • Social Security Number or Individual Taxpayer Identification Number
  • Permanent U.S. address
  • Valid contact details like email and phone number
  • Proof of steady income
  • Bank account for direct deposit

How to Get a Personal Loan Without a Credit Check

Here are the top three things you can do to maximize your chances of getting a no-credit-check loan:

1. Know Your Credit Profile

As with low credit scores, it’s harder to get a personal loan with a limited credit history, or what’s known as a “thin credit file.” But your credit report might be better than you think or may have inaccuracies that are dragging down your scores.

The Fair Credit Reporting Act (FCRA) mandates that each of the three major credit bureaus—Equifax, Experian, and TransUnion—give one free credit report a year. The best tactic is to request one report on the Annual Credit Report website every three months to check your credit profile. However, because of COVID-19, all three credit bureaus are giving free weekly reports until April 2021, giving you the most up-to-date information. Use your reports to decide whether a traditional or no-credit-check loan serves you better.

2. Visit a Brick-and-Mortar Bank or Lender

Sometimes it’s easier to get a loan with little to no credit or suboptimal scores if you directly ask the lender what alternative information you can provide to prove you’re a good candidate for a loan. Some lenders will let you know off the bat that they primarily use credit scores. You can then spend your time on those who look at other metrics, such as your debt-to-income ratio, on-time payment history, and accounts in good standing.

3. Know What You’ll Need

In general, applying for no-credit-check loans online can be similar to applying for a regular personal loan. You’ll be asked to provide your personal information, employer information, and financial details like your desired loan amount, bank account information, and net income. Online payday loans follow a similar process, and title loans also require you to provide your car’s details.

Depending on the lender, you might need to have additional documents handy:

  • Two most recent tax returns
  • Pay stubs or other proof of paycheck
  • Progress on debt and bill payments
  • Bank statements
  • School records

Where Can You Get a Personal Loan With No Credit Checks

Online lenders, credit unions, and payday loan companies are your best bets if you don’t want your credit scores to be considered or heavily weighed in approval decisions. Web-based lenders typically consider your income and assets, while payday-loan lenders only have minimal requirements.

Credit unions can look at your complete credit profile instead of just your credit score. If applying in person at a credit union, you can bring other documents that help showcase your ability to repay loans. This includes bank statements, payment records, and even a credit report containing your credit history if it shows you’ve managed your debts well.

Alternatives To No-Credit-Check Loans

No-credit-check loans aren’t the only option for those with poor credit. Some other choices to explore are:

Co-signed personal loans: You may have an easier time getting a personal loan at a bank if someone with a strong credit profile signs the loan as a co-signer. That person is responsible for paying your loan if you fail to meet payments.

Secured personal loans: These loans use collateral—such as a home, car, or CD savings—which are repossessed if you default on the loan. This makes secured loans easier to get for those with lower scores.

Credit unions: Credit unions are nonprofit organizations meeting the needs of the community they serve. They have a member-focused model that brings benefits like flexibility for borrowers with little to no credit histories. However, you must first become a member by meeting one of their “fields of membership,” such as your place of employment, residence location, or local and national group affiliations.

Payday Alternative Loans (PALs): This is a small-dollar loan with fair rates issued by credit unions. It serves as an alternative to payday loans.

Online lenders: Some web-based lenders specialize in loans with fair terms and rates for borrowers with limited to poor credit. These lenders are also known as Peer-to-Peer (P2P) lenders, and don’t always check credit scores when determining eligibility.

Credit cards: You probably already have credit cards in your wallet. If you can put part or all of your expense on a credit card without maxing it, you’ll end up paying much less in interest than you would with a no-credit-check loan. Just be sure to watch your credit utilization ratio. (More on that below).

How To Improve Your Credit Score

Having lower-than-average credit scores often feels limiting when looking to obtain credit, whether with a credit card, car loan, or personal loan. Better scores also mean smaller monthly payments and less cash diverted to interest payments.

But how can you raise your score or build credit? If you’re pulling a free credit report quarterly (or weekly until April 2019), check for errors. If you see inaccuracies, mail the credit bureau a certified letter with a return receipt request pointing out what’s wrong and providing supporting documentation. Also, contact your lender in the same way.

Then you can move on to improving the five factors that make up your credit score:

1. Payment History (35%)

The biggest boost to your credit score can come from making on-time payments. If you’re serious about better scores, make it a goal to pay at least the minimum amount due each month to keep your accounts in good standing.

2. Amounts Owed (30%)

If you want to build your scores, it’s crucial to keep your credit utilization ratio to less than 30 percent across all credit cards. If you use too much of your credit, lenders may make it mean you’re a high-risk borrower.

3. Length of Credit History (15%)

The longer you’ve been using credit, the higher your credit score can be. That’s why it’s vital to keep older accounts like credit cards open, even if you’re not using them, as long as they don’t have any annual fees.

4. New Credit (10%)

Opening numerous credit accounts too close together makes lenders wary and negatively impacts your score, so avoid this when possible.

5. Credit Mix (10%)

Having a mix of credit accounts gives you a better credit score. Credit cards, mortgage loans, and installment loans are all common options.

Get a Personal Loan Even With Little to No Credit

Personal loans aren’t only available to those with fantastic credit scores. Online no-credit-check loans like payday loans are a type of personal loan that can give you cash when you need it most. But if these loans don’t suit you, numerous other alternatives also take a holistic approach to lending. Regardless of the lender, always consider and compare loan terms, conditions, fees, and rates to make the best choice for you.