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No Credit Check Personal Loan

If you have a financial emergency and need less than a couple thousand dollars to get you through, you have the option of obtaining a no credit check personal loan, also known as a payday loan or a cash advance. Even if you have an acceptable credit history, when time is of the essence you may choose to borrow ready cash--often available the same day you apply--and pay the high percentage loan fee for the convenience of avoiding a bank overdraft.

According to the Consumer Federation of America, which conducted a survey of 100 internet personal loan sites, quick cash amounts from $200 to $2500 are available to borrow, with the amount of $500 being the amount consumers using these sites most frequently request. The most common interest rate charged by the sites in the survey was $25 per $100 borrowed, which equates to a 650% annual percentage rate (APR) provided that the consumer repays the loan as agreed, incurring no late fees or other additional charges.

Given the enormous interest typically charged by these no credit check finance companies, you may wonder why anyone would voluntarily agree to such terms. The truth of the matter is that in certain situations, consumers have no better options, and if they have the ability to repay the loan within the original time period agreed upon--usually by their next payday--the convenience and availability of such emergency funds is worth the fee.

Situations Requiring a Quick Personal Loan

No Credit Check Personal LoansWith the changing shape of the American family, including the slow disappearance of extended family ties, people may find themselves with no personal resources to turn to when emergencies occur. Circumstances which may require a consumer to seek a no credit check personal loan might include:

  • An unforeseen vehicle breakdown requiring immediate repair
  • A physical injury not covered by insurance
  • Emergency plumbing or electrical repairs
  • Emergency furnace repairs
  • Pet accident requiring emergency veterinarian services

Because most professionals supplying emergency services expect payment upon completion of service, the ability to get an immediate loan with a minimum of paperwork is invaluable in these situations.

Other Reasons to Seek a No Credit Check Personal Loan

Many people are concerned with their credit rating, also known as a FICO score. While experts disagree as to the degree of damage frequent credit checks actually do to an individual's score, in general good cause exists to limit the number of credit checks run on your credit history. Several credit checks requested by different finance companies within a limited time period may cause your "creditworthiness" to be questioned by the big three credit reporting concerns--Experion, Equifax and Transunion--resulting in points being deducted from your score.

If you are trying to obtain financing for a big purchase, a home for example, during the time that your emergency requiring quick cash occurs, you might choose to avoid damage to your credit score by seeking a no credit check loan.

The more obvious reason a consumer would pursue a no credit check personal loan is that he or she has a history of bad credit--that is, non-payment of previous obligations, bankruptcy, etc.--or has no credit history whatsoever, as in the case of some college students.

Qualifications Required for a No Credit Check Loan

No matter your situation or reason for the loan, virtually all finance companies offering no credit check personal loans require the following for approval:

  • 18 years of age or older
  • United States citizen
  • Proof of employment, such as a pay stub
  • Proof of an active bank account, such as a monthly statement

Depending on the company, you may also be required to:

  • Have a monthly income of $1200 or more
  • Show proof of employment for more than 2 months
  • Have a phone number where you can be reached
  • Have an email address
  • Have no more than 2 other cash advance or payday loans outstanding

Factors to Consider in Choosing Your Loan Provider

By far the easiest way to compare fees and terms when choosing a no credit check personal loan is using the Internet to visit some of the numerous sites vying for your business. If the hard facts you are looking for are not readily available on a site, you can use the live chat feature, if available, to get the answers you need to make an informed decision; otherwise go to a site where rates, fees, and requirements are clearly stated. Even in an emergency, taking enough time to make an informed choice is essential.

Be sure you know the following before agreeing to borrow from any lender:

  • Is the amount of money you require available in a no credit check loan?
  • What is the exact fee to borrow the specific amount you need?
  • What is the APR (annual percentage rate) this represents?
  • What is the specific date and time the full amount is due?
  • Will the payment be automatically deducted from your bank account?
  • Will interest payments be automatically deducted from your bank account, and if so, on what dates?
  • What happens if you cannot pay when payment is due?

If possible, get this same information from at least three lenders in order to make a line-by-line comparison and choose the most acceptable terms. If there is any requirement you do not fully understand, ask questions until you do. It is better to be informed from the beginning than to be confronted with nasty surprises later on.

Other Considerations

Companies offering no credit check loans, payday loans, and cash advances are subject to regulations which vary from state to state in the U.S. Regulations such as an interest rate cap on the fees the company may charge consumers in a particular state are levied by lawmakers to protect consumers.

However, when you are dealing with online loan sites, do not assume that your state regulations will automatically protect you, since some national companies located in other states may not be subject to those regulations.

Some finance companies providing personal loans offer larger loan amounts with reduced interest rates as you pay off more loans and take more out. For example, one online site will reduce the initial APR of 730% to an APR of 365% after you have taken out more than 18 loans with that company. However, as you will note from both extremely high rates, you will do better to manage your finances in such a way that you will not become a repeat customer.

Keep in mind that conventional annual interest rates typically charged for fully documented loans are available within the range of 6.5% to below 20%; you are paying a very high premium for quick, short term, emergency cash. Your best course of action is to limit such loans to extreme situations.

If you make a researched, informed decision in procuring the money and then make certain you pay it back on time, the price you pay to get safely through your financial emergency will probably be a worthwhile expenditure.

See also:

How to Get a Personal Loan with No Credit

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