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No Credit Check Installment Loans

An installment loan is a type of financing which allows you to repay a cash advance or make a purchase and pay for it over a pre-determined time period with equally divided, fixed payments. Many so-called payday loan companies offer installment loans as an alternative to their shorter term repayment loan products, often with the same no credit check approval process.

The advantage of an installment loan over a short-term loan is that it allows you to break up your repayment into reasonable payment amounts which are in step with your earning ability. By repaying a smaller amount each time you are paid, for example, ideally you will be able to stay current on all the items in your budget.

Conventional finance companies such as industry leaders American General Finance, Wells Fargo, and CitiFinancial routinely finance consumer purchases for such items as furniture and appliances on an installment plan, but these kinds of companies almost always check your credit history prior to approving a loan.

If you have not yet established a credit history or have negatives on your credit report, such as late or missing payments on previous financing, you will need to obtain your loan through a finance firm which extends no credit check installment loans. And you will certainly end up paying a far higher interest rate on the amount you borrow.

What Can I Finance with a No Credit Check Installment Loan?

No Credit Check Installment LoansThese monthly payment plan loans have been ubiquitous since their origin in the 1920s. Virtually any major purchase can be made on the installment plan, including:

  • A home
  • A vehicle
  • Furniture
  • Appliances
  • Boat
  • College Tuition
  • Dental Work
  • IRS Payments
  • Cell Phone

Financing is available for any number of purchases; the catch is that a negative or nonexistent credit history limits your ability to qualify for many of the financing programs. However, you do have other options.

How to Apply for a No Credit Check Installment Loan

A payday or cash advance finance company is a good place to start shopping for an installment loan. While not all of these kinds of lenders offer an installment product, most of them do approve loans with no credit check. There are many such companies with websites, and by visiting several you will be able to make a list of those offering installment plans.

Virtually all no credit check financing requires that you:

  • Are over the age of 18
  • Are a U.S. Citizen
  • Have been employed with the same company for at least 3 months (longer in some cases)
  • Have a checking account that has been active for a minimum of 3 months
  • Can provide an account number for direct deposit of your loan

Others may require, in addition, that you have proof of a minimum monthly income ($800 and up).

Keep in mind when choosing the loan amount for which you are applying, that most companies will not loan more than 20% of your monthly net income--this means your take home pay after taxes and deductions. So, if you make $2000 per month, your loan limit would be around $400.

Terms of Your Loan

Before making any decision regarding a finance company, make sure you have a clear understanding of how the loan will be set up. If you do not have the following information at hand, call the company to obtain it; if they are not forthcoming with what you need to know, cross them off your list. You will find that there are many finance firms offering no credit check installment loans, and therefore, you can afford to be selective. In fact, you cannot afford not to be.

Make sure you understand:

  • How and when your loan will be funded
  • What is the term—the payoff time period
  • How often are payments due—in most cases, monthly
  • How will payments be made—i.e., automatic withdrawal or by check
  • What is the fee if a payment is late
  • Is there an early payoff option? Is there an associated fee?
  • What is the interest rate—APR (annual percentage rate)—on the loan
  • What is the total amount you will have paid when the loan is paid off
  • What other fees, if any, will you be charged

Also, be sure to check with your bank to find out whether it charges fees to set up automatic deposit or withdrawal functions on your account.

Be as thorough as possible when researching loan offers, and try to compare each company using the same criteria in order to get the best deal possible.

The High Cost of No Credit Check Financing

Consumers with acceptable credit histories which confirm they have made good on their debts in the past qualify for conventional financing from banks on major purchases, such as homes, at conventional interest rates. These same individuals can easily finance purchases of furnishings and other smaller items through installment plan financing companies such as American General or Wells Fargo at competitive interest rates well below 10%.

In order to enjoy these privileges, consumers must provide the information which enables their financiers to check their credit histories. Some choose to bypass this requirement due to the fact that too many inquiries by loan companies may damage their credit scores. In these cases, consumers may choose to pay higher rates for a no credit check loan in order to safeguard their credit history for future financing.

Other consumers have no choice but to pay higher interest rates for no credit check financing due to already poor credit. No matter the reason, no credit financing carries a high price tag which may make you think twice about taking out such a loan.

According to one online finance company offering a no credit check installment loan option, the interest rate associated with this kind of loan amounts to 782.14% APR. That is several hundred times the rate collected by conventional loans. To put this into perspective, consider the following chart showing sample loan amounts and the final total you would pay on a 20-month installment plan:

Initial Loan Amount Final Amount Paid

$100 ...............................................$700
$200 ..............................................$1400
$300 ..............................................$2100
$400 ..............................................$2800
$500 ..............................................$3500

Your best strategy in accepting a loan with a high interest rate is:

1. Make absolutely sure you need it

2. Keep the payoff period as short as possible

3. Pay it off early if you can.

Finance Warning Signs

If you encounter any of these warning signs on a finance company's website or literature, you should consider looking elsewhere for your no credit check installment loan:

  • Non-optional add-ons to your loan amount such as “credit insurance”
  • No clear disclosure of interest rates and other fees
  • A fee for early payoff of your loan

After your loan is active, be careful of using the "checks" your finance company may send out, as these are no more than offers of additional loans to further burden your already extended budget.

By being an informed consumer, you can reestablish good credit with judicious choices and responsible payment of debt, effectively building a firm financial platform and the creditworthiness to qualify for conventional financing in the future.

See also:

How to Get a Loan with Bad Credit

How to Get a Personal Loan with No Credit

How to Get a Business Loan with No Credit

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