No-Credit-Check Loans: How They Work

As the world works to recover from the tumultuous economic effects of COVID-19, people may find themselves having trouble getting loans because of changes to their credit score. Additionally, there’s always a group of people who have never borrowed money before who may find themselves struggling to get approval because they have no credit. Luckily, loans for no credit and personal loans with no credit check are available. The money may be a bit more expensive to borrow, but you do have options.

In this article

    What are no-credit-check loans?

    When you take out a personal loan from a bank, credit union or lender, the regular practice is to check your credit score. Why? The lender decides approval and what rates to charge you based on how risky you are of defaulting (not paying) on the loan. While credit scores are not perfect, they are the metric the industry generally uses to gauge the riskiness of a loan.

    Check Your Personal Loan Rates

    Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

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    with our trusted partners at Bankrate.com

    No-credit-check loans step outside of this regular practice and offer loans without looking at your credit or by “looking past” what they find. For the borrower, this means a few things. First, it means higher chances of approval, as your credit score won’t be a disqualifying factor. Second, it generally means the money may be more expensive. No credit loans are inherently riskier for the lender, which means you can expect the lender to want a higher return rate for accepting that risk.

    Regarding the other factors of the loan outside the rate, there are some similarities and differences. The amount you are allowed to borrow is generally going to be lower. The repayment term options may be shorter, but you will also find some lenders offering loans with no credit with the same longer repayment terms.

    [Read: When Will the Economy Recover From Coronavirus?]

    Pros and cons

    Pros of online loans with no credit check

    • Higher chances of approval – Because there is no credit check or the results are looked past, your odds of getting approved are much higher if you have damaged credit or not at all.
    • Faster approval – It takes time for the lender to pull your credit report and make an approval decision. When there is no credit check, or it does not weigh into the approval decision, you can get access to your money faster with fewer hoops to jump through.

    Cons of online loans with no credit check

    • The money is more expensive – Because of the higher inherent risk to the lender, you can expect loans with no credit to be more expensive. You may see additional fees or a higher interest rate.
    • Your borrowing limits may be capped – Lenders have to be more careful with how much they lend out on riskier loans. You can expect to see smaller borrowing maximums on no-credit-check loans.

    Where can I get a loan without a credit check?

    When it comes to getting a loan without a credit check, you have several options. Generally, the best place to start looking is at online loans with no credit check.

    Quick2Lend – This company offers loans up to $3,000, repayment terms from 3 to 36 months and no upfront fees or costs.

    FastLoanDirect – The lender offers loans up to $35,000, with repayment terms available between 61 days and 72 months.

    Cash1Loans – While this company does a credit check (like most no-credit-loan companies), the website states that all credit scores are accepted. And if you need a lot of money, you’ll be happy to see that amounts up to $50,000 are available.

    GraceLoanAdvance – Loans are available up to $100,000 through GraceLoanAdvance. That being said, the company mentions that it only guarantees loans up to $7,500 with any credit score. For higher amounts, you may have to show some positive credit history.

    Slick Cash Loan – Unlike many no-credit loan companies that still do a credit check, Slick Cash Loan does not do one at all. The company has loans available up to $5,000, and you can complete the application online. You also get fast approval with instant access to your funds as soon as you are approved.

    Are there other options to avoid no-credit-check loans?

    No-credit-check loans are expensive and may not be the most ideal form of borrowing. Additionally, some lenders require collateral, which may not be something you are comfortable with when it comes down to making a decision. There are other options you have available to get the fast-funding that you need.

    Check Your Personal Loan Rates

    Answer a few questions to see which personal loans you pre-qualify for. It’s quick and easy, and it will not impact your credit score.

    Get Started

    with our trusted partners at Bankrate.com

    • Sell things you own – While it’s never fun to part ways with something you own, it may be a quick way to get cash without a credit check. If you’ve got something you don’t need that’s collecting dust, you could always look to have a garage sale or put it up for sale online or on a selling app.
    • Borrow from family and friends – Your credit score is just a number that might not showcase who you are and how reliable you are. Because of this, you may have better chances of getting the money you need by looking to borrow from friends and family. Make sure you treat this loan with the respect it deserves, though. Don’t take advantage of the generosity of those closest to you.
    • Secured loans – One option you may look into is a secured loan, a personal loan that is guaranteed by an asset that you have. One of the most popular secured loans is an auto title loan. With these loans, you get the money you need, but if you default on the loan, you will lose your car. These loans are risky and should only be used in extreme circumstances after careful thought and evaluation.

    We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Jason Lee

    Contributing Writer

    Jason Lee is a U.S.-based freelance writer with a passion for writing about dating, banking, tech, personal growth, food and personal finance. As a business owner, relationship strategist, and officer in the U.S. military, Jason enjoys sharing his unique knowledge base and skill sets with the rest of the world. Follow Jason on Facebook here

    Reviewed by

    • Andrea Perez
      Andrea Perez
      Personal Finance Editor

      Andrea Perez is an editor at The Simple Dollar specializing in personal finance. Prior to that she specialized in digital marketing content for online learning websites. She holds a master’s degree in journalism and media studies from the University of South Florida.