There are tough times in our lives when getting a loan with bad credit is next to impossible, but there are solutions like no credit check loans. But what are these loans? Why are they so popular among Australians? Are there any drawbacks to these services?
It is time to understand the benefits of using this financial service. It is time to have a plan B in case your request for a bad credit loan is denied.
Poor Credit History? No Credit Check Loans Are the Solution
No credit check loans are self-explanatory. When other loans or financial services require that you present your credit history (credit score), these loans can be obtained without this piece of information.
That means that even if you have a below average credit score, or even worse than that, you are still eligible for this type of loan. That’s the primary attraction of this financial service, and that’s also the main reason why you should consider applying for this loan if other options have failed.
What Are the Advantages of No Credit Check Loans?
No credit check loans can help you when other loans (lenders or banks) cannot. In other words, you will have a better approval rate with this service than with bad credit loans, for example.
The first thing you should know about no credit check loans is that your credit score isn’t analysed, which means that you shouldn’t worry about your credit score impairing the approval process.
Another advantage is that there are fewer lending requirements in comparison to other banking services. That means you will no longer be stressed with bureaucracy and other factors that make the lending process a nightmare. It is a less restrictive option that you should fully take advantage of.
No credit check loans are also more accessible in comparison to other loans. You won’t ruin your credit history further with multiple loan applications. That’s what usually happens when you think that you are eligible for a certain loan, but you are actually not.
No credit check loans come with a short term. That means that you will have fewer fees and less interest to pay in the long run. This is the type of loan that you get, use it to cover your debts and pay it the next month or so. It is easy and flexible.
These loans could also be unsecured with some lenders, which mean that you won’t have to use your house or car as security. In other words, if you default on your loan, you won’t lose the property you used to secure the loan, which is a significant advantage.
You can pay for no credit check loans when you get your salary. Because it is small and has a short-term, it means that it won’t affect your finances too much and in a few months, you can fully pay it back.
The Drawbacks of No Credit Check Loans
Of course, there are no financial services that have all these advantages without having some drawbacks. Here are some of the disadvantages you need to be aware of:
- The penalties
There are a lot of fees that come with this loan. Usually, the lender will use your bank account to withdraw payments. The withdraw process will be automatic. However, that is not the bad part. The bad part is when the lender tries to withdraw the monthly payments and ends up with nothing.
That is when the lender will apply a penalty fee, and that fee is quite high. If you have several penalty charges, you will end up losing several hundred dollars which is enough to get you into even more debt.
- Interest rates
Because you have bad credit and you applied for a short-term unsecured loan, you can expect high interest rates. This is nothing new considering the nature of this loan, but because you have a negative credit history, the lender will want to be as safe as possible with a borrower like you.
What If You Default on No Credit Check Loans?
If you have no other option but to default on this loan, you must expect a lot of problems. The first thing that will happen is that you will be harassed by debt collectors. However, that is nothing compared to having your funds withdrawn from your bank account. If you have multiple bank accounts, you can say goodbye to them as well. In other words, once you default on no credit check loans, you can expect a financial nightmare.
Conclusion
If you want to make the best out of no credit check loans, contact us for a free consultation to see if you’re eligible for it before you apply for the loan. We can help you choose the best option and offer you all the details you need.
