Go through this before applying for a personal loan, no credit check
Applying for a personal loan when your credit score is not the best may be a daunting experience. In your search, you may come across no credit check personal loans. This may sound like a great deal at first since you don’t have to deal with rejection. Different lenders offer such personal loans to borrowers. Though such loans can be a viable option when you don’t have good credit, they can lead you to more financial problems than you were in.
No credit check personal loans let you access a substantial amount of money that you can repay within an extended period. Since the lenders of these loans don’t check your credit score, you can get approved for the loan fast and receive funds within a single day. Before you get ecstatic about this loan, you should understand what you are signing up for.
Personal loans that don’t need credit checks have excessive interest rates. Though the lender may seem to have your interest at heart, they take advantage of your desperate need for cash. The fact that your credit score is wanting also makes you a high risk to lenders. The APRs that come with such loans are therefore excessive so that the lender does not suffer losses in case you don’t make repayments. The annual percentage rate can be up to 400%.
Apart from interest, such loans also come with high origination fees. If you pay the loan late, you should expect to be charged extra fees for late payments. Paying the loan before the due date is also not an option since this can lead to early termination fees. Such fees make it easy for one to get stuck in the vicious cycle of debt. You may be forced to apply for other loans as you attempt to clear off this personal loan.
Some of the personal loan lenders that offer no credit check loans don’t report the payment activity to credit bureaus. You may not be able to use the loan to build your credit history. Most of the loans under this category come with extended repayment periods. Though this can seem like a blessing to borrowers, it is not. The lender ends up collecting so much money in terms of interest over the life of the loan.
When applying for the loan, you can let the lender make automatic withdrawals of the loan from your bank account every month. Though this arrangement helps you make consistent payments, it comes with its share of problems. If you don’t have funds in your bank account, you can incur a bank overdraft which comes with additional fees.
It is possible to come across illegitimate offers as you look for a personal loan without credit checks. The industry is full of scammers trying to capitalize on desperate borrowers. Giving out your data, such as social security number to an illegitimate lender, can put you at risk of identity theft. You should beware of any suspicious activity that as you apply for this loan.