No Credit Check Loans – What to Know

Your credit history has a serious influence on your ability to borrow. If you have do not have credit, or have bad credit, you may feel that your options for accessing a loan are limited. Unexpected circumstance that require money can pop up at any time, knowing where to go can sometimes be a problem. Learn about no credit check loans and how to get approved.

*Warning about borrowing – the cost associated with small loans can be high and may not solve your money problems. Consider alternative financial help for common borrowing situations: help with bills, help with rent, help with debt or speak to a Community Action Agency to discuss financial assistance options.

What to know about no credit check loans
Most lenders who provide no credit check loans will base their decision on your ability to service the loan based on your current financial situation. The main elements they will look into include your employment, your income level (including benefits) and your expenses.

Based on their own risk criteria and state based regulation, they will then determine how much they will lend you if you qualify. Many states will only let you borrow a total of $700 or 30% of your gross monthly income, whichever is less. So depending on how much you need to borrow, this may not be the best option.

Compare No Credit Check Loan Options
When comparing loan products and lenders, there are a few important elements to consider. The below will assist you in avoiding un-reputable lenders and wasting time.

- Search online for reviews and complaints of the lender
- Check that the lender is licensed in your state or nationally
- Check that all costs are disclosed (if you are unsure, call)
- Loan eligibility, if you are unsure about any component of the eligibility criteria, call them and get clarification prior to applying.

Weighing up benefits versus drawbacks
Benefits of No Credit Check Loans
- Flexible approval criteria
- Quick approval and turnaround time - as little as one hour for some lenders
- Convenient online process - weekend funding with some lenders

Drawbacks of No Credit Check Loans
- High borrowing costs – establishment fee
- High fees for late or missed payments (if applicable)
- Loan amount are small

Alternative No Credit Check Loan Options
As the costs associated with these loans can be high, considering other options can be beneficial – and cheaper.

Salary Advance Loans – Many banks and credit unions provide this service to their customers. As they are not widely advertised within branches, you may have to ask your banker. Loan amounts are generally up to $500 and come with little to no fees…interest rates may vary.
Stretch Pay Loans – These are commonly provided by credit unions and have a higher loan amount then salary advance loans going up to $1000. The repayment period is also longer at 12 months.
Checking Account Advance– This is essentially a line of credit through your bank. As long as you have a solid history of deposits with your bank, getting approval is fairly straight forward.
Friends or Family – This is not for everyone but can be a good option in emergency or rare occurrences. Everyone needs a bit of help sometimes. When unexpected situations popup, friends and family can be the most understanding and helpful.
Pawn Shops – This may not be the best choice but it is an option. Just be sure that you will be able to pay your bill as to not lose your pawn.

The loan process – How to get approved
Loan payments are generally structured around you pay check dates and are setup through a direct debit to your bank/savings/checking account. Be sure to account for all bills within your budget as the repayment is via a direct debit and can leave you short of cash should you not budget correctly.

Most no credit check lenders offer an online application process. Eligibility criteria generally consists of: being 18 years old, a US citizen or resident, have a bank account and at least 1 month proof of employment.

Other details you may need include:

- Personal details: Driver’s License, non-driver identification card, military card, passport
- Employment details: pay stub(s)
- Bank details: Account details for where money is to be deposited
- Benefit details: A statement for any income received by the government or outside of your employment.
- Personal finances: You may need to provide detail on your total monthly expenses. This can be directly provided by you. In some cases, the lender may ask for a bank statement.

*The main thing the lender is after is your ability to service the loan without default.

Frequently Asked Questions about no credit check loans
How much are the loans?
Loan amounts and costs will vary from state to state. Most states to provide borrowers protection from predatory lenders, capping fees and loan amounts. As an example; there are numerous states that have a maximum fee of 15% on the first $500 borrowed and 10% above $500. Check with your states Department of Financial Institutions or equivalent.

What happens if I can’t repay the loan?
If you are unable to meet the repayment due date, you can request an instalment plan with the lender. Some states prohibit the lender in charging fees to renew the loan or create an instalment plan. Check with the terms of the lender prior to applying, they must operate under the relevant legislation.

Can I repay my loan early?
Most lenders allow for early repayment and do not charge an additional fee. Check the terms or ask to be safe.

I’m on Social Security, can I apply?
This can vary from lender to lender but there are many lenders that do accept social security payments as income. Learn more about Social Security loan options here.

How much can I apply for?
This comes down to your serviceability, which is dictated by your income against expenses. Many lenders also have set limits on what they will allow for any first time borrower regardless of income.

How do I file a complaint against a lender?
Most reputable lenders will try to work with you as they are in a tightly regulated industry. In the instances where a lender is non-responsive, consider speaking to your states Department of Business or Finance. Alternatively, you can also file a complaint with the Consumer Financial Protection Bureau. Don’t forget review sites as well.

With all borrowing situations, you should consider the fees and rates that will be applied before you take out the loan. Be sure you are able to make the repayments based on your budget and personal finance requirements. Lenders don’t understand your personal circumstances, just because you qualify for a loan, doesn’t mean you should take one on. Thoroughly go through your budget to makes sure you will be able to afford the repayments.