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How To Get A Personal Loan With No Credit Check

How To Get A Personal Loan With No Credit Check

If you have bad credit you might have a difficult time being approved for a personal loan. The worse your credit score is, the harder the time you will have in getting a loan. This can cause huge problems for someone that desperately needs a loan. Fortunately, there are ways you can  actually be approved for a personal loan without having any sort of credit check.

This article will guide you through how and where you can be approved for a loan without a credit check.

1. Traditional Lenders

Before you look for a no credit check loan using nontraditional methods, it is worth going the route of traditional lenders to see if you can get a loan without a credit check.

Inquire with banks and credit unions in your area, and you may still be able to quality, even with no credit to bad credit, circumstance depending.

Some banks and credit unions can do this for you if you show you have a steady, high income to cover the loan payments without checking your credit score.

If you have a high, steady income you still might be able to receive a loan if you really look hard enough.

It is important to pursue a loan with financial institutions first because the interest rates will be much lower then any loans you will get with other sources.

You can try an online loan lender with a good reputation, such as Lending Tree.

Note that if you don’t have good credit history, you will pay higher interest rates if you do manage to get a personal loan from a traditional lender. However, the interest rates given will STILL be superior to non-traditional loans.

2. Micro Lending / Peer to Peer Lending

Another route you can take to obtaining a loan with no credit check is using microlending. Micro lending is best described as loans offered by individuals to other individuals who might be unemployed, have poor credit, or cannot receive credit from banks or credit unions. Think of microlending as a peer to peer system that uses the internet to grant these micro loans. Your loan can be funded by one lender or by a group of lenders where each lender contributes a percentage of the total amount of the loan. This minimizes the risk for the lenders, which makes it easier for you to be accepted for the loan.

To receive a micro loan, your credit might be checked, but it is not checked to determine if you can receive the loan, it is checked to determine your interest rate. The interest rates can vary greatly, for example on the micro-lending website prosper, a highly rated borrower will pay a  minimum of approximately 5% on a loan, while a higher risk borrower can pay all the way put o 30% interest on a loan.

There are some well known and trusted micro-lending websites that you can use to apply for a micro loan. Some of the more popular microlending sites to explore include:

Make sure to read our Prosper Lending Review, our Lending Club Review to get an overview of what each of these peer to peer lending programs offer.

3. Payday loans

If you only need a smaller amount of money for your loan, or if you need the money asap, then you should get a payday loan. The interest rates will be higher, and there can be some expensive fees added to the mix.

You need to be very careful with Payday loans. People can EASILY get caught in a cycle of debt they cannot repay just from the interest on payday loans. Very shortly, the interest owed on an unpaid payday loan can supercede the actual principal amount of the loan! Even worse, people often take out a payday loan to pay off the interest on another payday loan which creates a cycle of debt.

However, there are some advantages to payday loans, you can often receive the loan within 24 hours, and you can usually receive up to $1500 and sometimes more. If you need a loan for over $1500 then a payday loan usually will not be the best option for you to pursue, as you might be better off pursuing a pawn shop or title loan.

To get a Payday loan you can either go in person to a payday loan center, or it can all be done online. If you choose the online route, you will have to provide your banking information when the loan is accepted, and the amount borrowed will be deducted from your checking account on the due date.

Now there are all kinds of different payday loan institutions available, however you obviously will want to pick the best ones, with a good reputation.  The following are some of the more popular and established payday loan centers.

  • Check City
  • Money Mart
  • Wonga
  • NetLoan USA
  • Check n Go

Again, keep in mind the high fees that can be associated with Payday loan companies, which include sky high-interest rates. Unfortunately, many times this is the only option many people have to pursue when they are obtaining a loan. Be sure to shop around different payday loan businesses and look for the lowest interest

Keep in mind there are hundreds of these types of lenders around since there is so many people in need of loans with bad credit. Most of them are credible however evaluate whether or not they are direct lenders, or third party lenders. If it is a third party lender, be careful as you will not know where or who exactly is obtaining your personal information such as your Social Security Lender. It is preferred that you choose a direct lender, rather than a third party lender. A third party lender should only be used as a last resort.

Furthermore, some of these third party lenders will sell your personal information to other companies which can lead to some privacy issues. Be sure to ask if they resell your personal information, and if they do, do not get a loan from one of these companies.

So as a final warning — payday loans are a good option for a QUICK no frills personal loan with bad credit, but never take one out if you don’t have the money to repay it quickly. We only recommend you use such a loan in an emergency and if you have an upcoming payday that can pay off the loan in full, within a few days or a few weeks. Do not consider a payday loan if you don’t have a payday that can repay it in full in less than a month.

4. Title Loans

A title loan is a popular option for people with bad credit because it is quick and of course your credit is not checked. A title loan is a loan where an asset is used as collateral in exchange for cash. The most common type of a title loan is a vehicle title loan. If you own a vehicle, you allow the lender to place a lien on your vehicle, which temporarily hands over ownership of the vehicle in exchange for a cash amount.

However, a title loan can also be done with another asset another then a vehicle. Any asset that holds value can be used as collateral, which can include jewellery and valuable antiques.

To apply for a title loan, perform an online search for ‘title loans’ and a variety of results will be displayed. Once you find a title loan in your area, you will have to fill out a form that specifies the details of your vehicle. You will need to input the make, model and the mileage of your vehicle. With this information the company will determine the amount of collateral you can receive in exchange for ownership of your vehicle. They will ask other personal question about your entire financial situation, and this information will be used to determine the interest rate that you will pay. On average the interest rate will be similar to what you would pay on a credit card.

Advantages of title loans

  • title loans are a very quick with no lengthy approval process, if you have a steady income you will get the loan easily. Many times you can receive the loan the same day you apply for the loan
  • if you have a car title loan, you can still drive your car and use it normally, as only the ownership of the vehicle changes, the lender does not keep the vehicle themselves

Disadvantages of title loans

  • the interest rates are usually very high, and will definitely be higher than interest rates from a bank loan. Expect interest rates to be similar to interest rates of credit card and even higher. Some title loan rates can even exceed a whopping 50%, however, some states have laws on how much interest can be charged.
  • most title loans have to be repaid quickly, so you must ensure you have a consistent cash flow to cover the payments.
  • title loans can be risky as if you default on the payments, the loan issuer can take legally take your vehicle or whatever asset you used as collateral away from you.

5. Credit Card Cash Withdrawal

Another way to finance yourself a small loan is through your credit card, if you have one. Credit cards allow you to take out a cash advance on the balance allowed. So if you have say a 2000 or 3000 dollar credit allowance, you can withdraw this amount from an ATM or bank. Keep in mind you will start to pay interest from the moment you withdraw this amount (interest is usually charged per day). As such, you want to pay this amount back as quickly as possible. Withdrawing cash from your credit card is an alternative (arguably a better one) than taking out a payday loan, but you need to look at the fine details of a payday loan term and your credit card company’s interest rate for your specific card. In some cases, payday loans will be better. This is not designed to be used as a long-term loan — only a short term emergency cash loan. We’ve written an article comparing personal loans vs credit card withdrawals.

6. Overdraft

Some checking accounts offer an overdraft service where you can withdraw a negative amount from your account. The amount depends on your specific bank and account features. Overdraft is usually smaller (under a thousand dollars) amounts and you usually pay a penalty fee for the withdrawal. You may or may not be charged interest from the time you withdraw a negative balance, depending on your bank and account terms. While we don’t recommend tapping into your overdraft service, if your account has one, you can use it much like a credit card with drawl or a pay day loan for emergencies. Again, you must be able to repay this as soon as possible — if you need a long term loan with good interest rates meant to be repaid over time, THIS IS NOT THE TYPE OF LOAN FOR THAT.

7. Pawn Shop Loan

Another option to receive a loan is to bring a valuable asset to a pawn shop such as jewelry, and the pawn shop will give you a loan for the amount that they believe the asset you bring in is worth. If you fail to make the payments on the loan, the pawnshop can sell your asset. This is very similar to a title loan, except it is less formal, and can include a wider variety of assets that can be used as collateral.

You might think a pawn shop loan is ‘shady’ or ‘risky business’, but it really isn’t. Pawn shops are actually regulated by federal and state laws, so rest assured. It is important to know, if you have a very expensive item, the pawn shop might ask for proof that you are the rightful owner of the item. As with most non-bank issued loans, be prepared to pay higher than usual interest rates.

8. Ask Family or Friends

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You can always ask family or friends for a loan, some would be more than willing to help you out, especially if they are close to you and trust you. The great advantage of doing this would be that you would not have to pay any interest at all.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. ‘

He spent several years reading as many financial advice books and blogs as he could.

And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created echeck.org to help others do likewise!

1 Comment

  1. ben

    Excellent article. Thankyou…I am British, but it was still very helpful, and honest (which is the most important thing)

    Reply

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