As surprising as it may sound, it is entirely possible to get a loan with no credit check, as these types of loans are usually awarded by online lenders that have less stringent eligibility requirements than most traditional lenders.
However, it is important to note that no credit check loans only mean that the lender will not carry out a hard credit pull on your credit report. Instead, they will carry out a soft credit check to simply verify your information.
Consequently, although most banks and credit unions would base your eligibility on your credit history, these online no credit check loan providers will frequently base their choices on whether you’re employed, how much money you generate, and how you manage your bank account.
In other words, you can easily secure a 1 hour loan with no credit check as long as the lender is able to see that you have recurring direct deposits into your bank account that indicate you have a consistent flow of income.
Types of Loans That Don’t Need A Credit Check
There are a few different types of loans that you can apply for without having to go through a hard credit pull to secure the loan approval that you need. Some of the most common include:
#1. Payday loans
Payday loans are short-term loans of small amounts that are usually meant to be paid back in full once your next paycheck arrives. They don’t typically require any credit checks, which means that you can access the funding you need even if your credit history is less-than-stellar. Plus, they are often quick to process, but the downside is that they tend to come with exorbitantly high-interest rates.
#2. No-credit-check installment loans
No-credit-check installment loans allow you to borrow a sizable amount of money and repay the sum in fixed monthly payments. Most lenders will only carry out soft credit checks, so even if you have a bad credit score, you can secure the funds you need to deal with large expenses, e.g car repairs, medical bills, home repairs, etc.
Sarah Ross, the co-founder of CocoLoan, went on to add, “No-credit-check installment loans are often the best loan option for bad credit borrowers that are looking for a line of credit that offers high loan amounts with favorable interest rates and reasonable repayment periods.”
#3. Title loans
Title loans are a type of secured financing in which your car is used as collateral to get approval. In essence, you will provide the lender with your car title in exchange for funding, and the amount that you receive will usually vary depending on the value of your car. This means that you will still be able to drive your car while you repay the loan.
The benefit of this type of no credit check loan is that borrowers of all credit types can get approved and since the level of risk to the lender is low, you can also access higher loan amounts and lower interest rates. However, if you fail to repay your loan on time, there is a high chance that the lender may repossess your vehicle.
Where To Apply For A No Credit Check Loan?
You can apply for a no credit check loan online either through a direct lender or through a credit broker service like CocoLoan. In most cases, it is often recommended that you use the latter option, which can be done by following the steps below:
Step 1: Fill out the online pre-qualification form.
The first step is to go to the CocoLoan website and fill out the online form with your personal and financial information. In most circumstances, you’ll be asked for information like your name, address, social security number, bank account number, credit score, and so on.
This information will be used to determine your eligibility and will also allow them to match you with the right loan provider within their network.
Step 2: Compare loan offers.
Once you are done filling out the form, you can submit it, and it will be reviewed by their partner lenders. If you are authorized, you will be offered a number of loan offers to consider, each with its own unique set of rates and terms.
You can compare them until you find a lender that is willing to provide you with the most favorable deal. Once you do, it’s a simple matter of reviewing the loan agreement in detail until you are satisfied.
Step 3: Wait to receive your loan
You can then e-sign the agreement, and the lender will start processing your funds. In most cases, you can expect the money to be deposited by the next business day. At this point, it will be your responsibility to ensure that you repay the loan on time. Otherwise, you may face substantial late payment penalties or potentially be reported to the appropriate credit bureaus for defaulting.
Top Tips When Choosing No Credit Loan Providers
Before you borrow a no credit check loan, there are a few important things that you should always look at carefully in order to ensure that you are choosing the best possible lender.
Interest rate and fees: You need to look at the interest rate and fees that the lender in question is offering and calculate how much this will add to the total cost of repayment.
Loan repayment term: You also need to consider the loan’s repayment term, as you should not accept a loan offer if you are not confident that you can make the payments on time.
Extra fees and costs: Some lenders may charge extra fees such as origination fees, prepayment penalties, late payment fees, etc. These add-on costs can significantly raise the cost of the loan, so you should aim to choose a lender that offers the lowest fees possible.
Lender reputation: It is always important to check past client testimonials and reviews, as this can often help you identify trustworthy and reliable lenders from unscrupulous ones.
Summary
No credit check loans can be appealing, especially if you happen to have a poor credit history. After all, they also offer fast funding and can even be accessed online. However, it is important to remember before applying that these loans tend to come with extremely high APRs, costly fees, and short repayment periods.
In this respect, using an online loan broker like CocoLoan can often ensure that you are able to instantly compare lenders until you find the one that is in the best position to provide you with a competitive offer. And in the event that you can’t find an affordable offer, you can always consider alternative loan options, such as borrowing from friends and family.
It is also a good idea to consider setting up autopay when you borrow a no credit check loan, as it will ensure that you don’t miss a repayment. This in turn reduces the risk of being charged high late fees that could end up raising the total cost of your loan and leaving you stuck in a cycle of bad debt.
