Ever applied for a loan and felt rising fear over how your credit score may impact its approval? No credit check loans exist for just this situation. Avoid worrying about your credit score and get the cash you need, when you need it. But just exactly what are no credit check loans and who can apply?
What Are No Credit Check Loans?
No credit check loans are small, personal loans that can be approved without undergoing a credit check. They can also be known as fast cash loans or payday loans. There will still be other qualifying criteria such as:
- Your income
- Reason for taking out the loan
- Details of other liabilities
- Your age – you must be over 18
- Bank statements for the past 90 days
- Employment status (your employer may be called for verification)
- Identity documents such as your license or Medicare card
Not every lender will approach the application in the same way or require the same information. And while a no credit check loan avoids a credit check, the details of the loan will show up on future credit checks. It is also worth noting that just because a credit check isn’t performed, it doesn’t mean the loan will gain approval.
What Are No Credit Check Loans Suited For?
No credit check loans are usually limited to amounts around $5000. Making them ideal for sudden, unexpected expenses such as car repairs, medical bills, loss of income from job-loss etc. Should you find yourself short on funds for smaller amounts such as groceries or utility bills, these loans can be beneficial also.
Loan terms can range from as little as 16 days to 2 or more years, usually being capped at 5 years. Should you have a short-term need for funds and know you can repay it rapidly, they can create a way out of financial hardship with minimal stress.
Benefits Of No Credit Check Loans
One of the key benefits of no credit check loans is that you can gain access to small amounts of money to improve cash flow at critical times. Your past credit history is not taken into account and loan approval is straightforward so long as you can provide the basic information required.
The amount you are approved for will depend on the specifics of your situation and will be tailored to suit. The loan term is also negotiable and will be determined after an assessment of your circumstances and amount you are approved for.
How Much Do No Credit Check Loans Cost?
As with any loan, interest applies with the interest amount calculated off the remaining balance. Aside from interest, no credit check loans also attract:
- Establishment fees of up to 20% of the loan amount
- Monthly fees in the vicinity of 4% of the loan amount
- For loans above $5000, interest up to 48% in addition to establishment fees
Despite their convenience and appealing lack of credit check, these loans should be treated with caution. Do you have a poor history of repaying loans or difficulty managing your current costs? If so a no check credit loan can quickly spiral out of control due to the high interest and added fees.
If you are a savvy budgeter and intend to pay the loan out ahead of schedule, most payday lenders will allow this without any exit fees.
Are There Any Risks Associated With No Credit Check Loans?
All loans have pros and cons, no credit check loans are no different. The greatest risk with any loan is what happens if you are unable to repay the loan. Defaults on your credit history from unpaid loans can have a long-lasting impact on your financial future.
Other risks associated with no credit check loans are:
- Unreputable lenders and loan sharks. Always ensure your lenders are licensed and accredited. There is legislation to stop you being overcharged which you can review via ASIC.
- While no credit report is ordered from the credit bureau, each application will show up on your report moving forward. So avoid multiple applications.
- As an unsecured loan, the lender can instigate legal proceedings against you to recoup the funds if you cannot repay it.
- Escalating costs, rates and fees will be set at the time of the loan approval. Be sure you are across these as late fees can quickly add up and make it difficult to pay down the loan.
If you are still wondering ‘what are no credit check loans’, put simply, they are a form of loan which can provide you small amounts of money when you need it, but you can expect to pay higher fees and have less flexibility due to the risk on the lender.
Need A Loan? Talk To The Experts
Bad Credit Loans specialise in helping those with bad credit to secure finance. Whether you require a no credit check loan or find another option that suits, our expert team can walk you through your options and ensure that bad credit doesn’t hold you back. Still wondering “what are no credit check loans?” Give us a call on 1300 123 328 and let our team talk you through everything.