There are times that unforeseen circumstances happen and you find yourself in need of some money fast. This means getting a loan to help with your financial situation. For people with bad credit scores, they may have a more difficult time.
Since bad credit history can affect your application approval for fast loans, there are other options like no credit check loans that may be more helpful to get the quick funding you need. We explain are no credit check loans all about
There are many forms of no credit check loans. They can be personal loans, payday loans, title loans, and even installment loans. The choice is totally up to what type of loan works best for you. When you say no credit check loans, this means that the lender doesn’t check on your credit score and credit history to approve your loan.
No credit check loans are often unsecured loans and for the short term. This is more practical for people with low credit scores since the application process is easier and the approval rate is higher.
Like most types of loans, this type of loan can be a safe and responsible way for you to get out of a sticky financial situation.
However, there can also be instances where you come across predatory loans that are designed to trap you into losing more money. Here are the three main things you have to look into before you start the borrowing process:
When it comes to no credit checking loans from lenders, there is always the inevitable cost of borrowing that money. This can be the interest rate that the lender gives you as well as other costs that the lending institution may charge. Another rate you have to look into when considering a loan is its annual percentage rate or APR.
This is the interest rate you will be paying over the course of a year. If you borrow $500 with an APR of 200%, this means that you’ll be paying an overall cost of $1,000 just for borrowing $500, bringing the total amount that you shell out to be $1,500 over the year. There are also carrying costs that you might have to add on if you are borrowing from online loans that offer peer-to-peer lending.
The loan term is the time it will take for you to pay back your loan and other fees. It also means that the longer your loan term is, the smaller the amount of money you will have to pay whether it is monthly, bi-monthly, or weekly installments.
The shorter the term, the higher the amount you’ll have to pay. Most predatory loans out there are usually associated with really short-term loans of around 30 days or less.
Most safe and reliable lenders out there will always look into your ability to repay before they consider granting you a loan. Check into the lender’s terms and conditions and their application process to see what they look for in a borrower.
If they are checking on your employment and income, it is a sure sign that they aren’t trying to trap you. Those short-term loan lenders who don’t ask you how your going to pay them back usually means that they are looking to trap you in the long run.
Your personal information like your bank account is something that you shouldn’t give to anyone casually. There are some predatory lenders who get the money you owe directly from your bank account and may take advantage of this. It is best to be on the safe side and check out what the information you are giving will be used for before you give your personal details.
The terms and conditions of your instant loan are something that you should never just skim over. You are looking into something that involves your bank account so making sure you aren’t going to get in trouble is your safest bet. Here are a few things that are red flags and signal that the lending company may not be for you:
High-interest rates mean that the loan is not worth applying for. You may be blinded by the easy application process and funding, but think about how much the money is really going to cost you.
The best way to do this is to look into the lender’s loan APR. $20 interest to $100 per month doesn’t seem too steep. If you calculate it for the year, you’ll be paying $1200 on interest alone.
Taking out short-term loans to cover what you owe from your previous short-term loan is never a good idea. It raises your interest rate and other fees and buries you deeper into debt.
With all this being said, there are loans with no credit check from direct lenders and online lenders that are safe and reliable to borrow money from. This is a great way to get the money that you need even if you do have a bad credit score.
All you have to do is be very diligent in looking into all the details of the loan before you apply for it. Check the term of the loan as well as the interest rates. Remember that having the ability to repay the loan and fees back is the most important thing to consider.
This can not only help you with your current financial situation but also make your credit score better in the future.