Nowadays, money is tight for lots of people. So, when an emergency strikes or you need the extra cash your budget can’t accommodate, your only option is to take out a loan.
It may seem that banks hand out loans easily, but this is not the case. To be eligible for a loan, you need to have a good credit score. Your credit score shows the lender your credit history and indicates whether you can afford to repay the loan and if you have a history of paying back previous loans.
There are two reasons you would want to get a loan that does not require a credit check: you have a bad credit score, or you have no credit score at all. If you don’t have a credit history, it’s worth building it up for other purposes besides loans, like renting an apartment.
Whatever your reason is, there are options of no credit check loans with guaranteed approval available.
Loan Options That Don’t Require a Credit Check
If your credit score is poor or not you have no credit score, it’s unlikely you’ll qualify for a traditional loan. So, your only choice might be to get a loan where the lender doesn’t check your credit history. The following loan types are available:
- Payday loan
- Pawn shop loan
- Credit union loans
- Early payday apps
A payday loan is an extremely convenient option, especially if you need cash fast. The process of applying is quick. To apply, you must be 18 or more years of age, have a bank account, a cell phone number, and prove that you have an income by providing a pay stub or your bank statement.
The loan is approved in a matter of minutes. You’re either given the money in cash, or the lender can deposit it into your bank account on the same day.
The convenience comes at a price, though. Payday loans typically have very high-interest rates and fees and must be paid back within two to four weeks. If you’re not able to pay the loan back within the stipulated period, you have the option to extend it, but that comes with an additional fee.
If you have something valuable like jewelry, a laptop, electronics, or tools, you can use them as collateral to get a pawn shop loan. To qualify for a pawn shop loan, you must be 18 or above and have an identity document. The pawn broker will evaluate the item you want to use as collateral and offer you a loan based on about 25% to 60% of its resale value.
Pawn shop loans usually have high-interest rates, and you might also need to pay additional fees like insurance and storage. The period you’re given to repay the loan is a little longer than that of a payday loan and is typically between 30-60 days. If you cannot pay back the loan, the pawn shop will sell the item you used as collateral.
If you’ve joined a credit union, you might be able to get a loan through them as a member. Unlike banks, credit unions are community-based, so their approval process is different. Credit unions usually offer smaller personal loans with lower interest rates and fees. Instead of looking at your credit history, they may consider other factors like your history as a credit union member before approving the loan.
An early payday app allows you to access a portion of your salary or wages before your payday. They can also provide you with a loan based on your income in the future. Depending on the app you use, the fee you pay will vary, but there’s usually little to no interest charged.
While this is a cheaper option than payday loans, most early payday apps don’t give you loans but charge you a fee to access your salary before payday, so you can only withdraw the amount you earn. The money you withdraw early is taken out of your next paycheck. You can set up an early payday app by yourself, through your employer, or via an online bank.
References
- https://www.experian.com/blogs/ask-experian/how-to-get-a-personal-loan-without-a-credit-check/
- https://www.nerdwallet.com/article/loans/personal-loans/no-credit-check-installment-loan
- https://www.forbes.com/advisor/personal-loans/credit-union-personal-loans/
- https://www.cnbc.com/select/personal-loan-lenders-to-consider-if-you-dont-have-credit-score/
- https://www.investopedia.com/best-personal-loans-for-bad-credit-4774349