To the dismay of people with bad credit, lenders won't give out a loan until they've done a thorough check of the borrower's financial past and credit history. The credit check process is embarrassing for people who want to borrow money but have bad credit, and they hate it because it hurts their chances of getting a good loan offer. They feel a lot better about getting a loan without a credit check. But it is risky for lenders because they have to give money to someone without knowing anything about how good of a credit risk they are.
There are two kinds of loans with no credit check: secured and unsecured. Secured loans with no credit check use the borrower's home or other property as collateral.
When you get a secured loan with no credit check, the loan amount is based on how much the collateral is worth. Secured loans for people with bad credit give out a lot of money and have lower interest rates. The average APR for a secured loan with no credit check is between 8% and 20%. Secured no credit check loans can also have terms of up to 20 years for paying them back.
The unsecured no credit check loan doesn't require any kind of security. This kind of loan doesn't put the borrower's home or any other property at risk. It can also be used by people who don't own a home but rent one. Unsecured loans with no credit check seem like a risky bet for the lender. So, the interest rates on these loans are higher. The average APR is between 16 and 30 percent, and the loan amounts are usually less than GBP1000. Unsecured loans with no credit check must be paid back in a few weeks. This loan is paid back at the same time each month as the salary or paycheck.
Loans with no credit check can be used for anything the borrower wants. They can use it for any home improvement project, to buy a car, to take a much-needed weekend trip, or to get that cosmetic surgery that will boost their mood. In fact, good lenders don't put any restrictions on how the loan amount can be used before giving it.
If a credit check isn't an option, lenders look for other ways to make sure the borrower can pay back the loan. Before giving a loan with no credit check, lenders ask for proof of employment and how long the job has been held. By setting a minimum salary limit for borrowers, lenders make sure they are working with people who are at least somewhat financially stable. In the case of an unsecured no credit check loan, the amount of the loan is based in part on how much the borrower makes.
To get a good deal on no credit check loans, a borrower must look for the right offers. In this IT-enabled world, it's easy because a borrower can get quotes and compare APRs and other loan terms with the click of a button. Almost all banks and other places that lend money have websites and toll-free phone numbers. If a borrower applies online with all the necessary information, they will get a quick answer.
The loan being offered does not require a credit check, but if the repayment schedule is followed and the loan is paid off on time, it can help a borrower's credit score. This can help a borrower get out of the muck of having bad credit and build a good credit history.
