There’s no doubt that No Credit Check loans are among the higher cost loans out there. What makes them still so prominent and widespread? Isn’t the cost of the loan what makes them unattractive to people? Clearly, the market is proving since years that that’s not the case. While loans that people use to fulfil wants and aspirations (like car loans and home loans) are to a huge extent affected in demand by their cost, the same does not seem to stand so true for loans that serve people in urgent needs of funds for various reasons.
When in such a situation, options can be limited for a lot of people. Quick loans and borrowing from friends/family seem to be the available solution but not many wish to choose the latter and especially not after having done it once or twice before. Hence, quick loans are increasingly being the most preferred choice and as you read ahead, you shall see that a lot of people do not tend to have a strong credit history, making No Credit Check the only available quick loan option that can to an extent be relied upon.
Why do so many Individuals have Poor Credit Scores?
Roughly half of the millennials in the US do not have a healthy credit score. People outside of that group are a little better off but not by a huge number. What leads to this? Let’s take a look at the top reasons:
- Poor understanding of the credit system: Not knowing how to prioritize payments and not knowing when shutting down a credit account (eg. Credit card) can actually be harmful for the credit scores, is an easy way to lose out on your credit score.
- Using one credit card for everything: If you have and use just a single credit card for everything, use it to a high percentage of its limit and don’t repay it fully each month, there’s a significant hit that you’re causing to your credit score.
- Not checking and acting upon errors: The credit system is complex. Once a year, you can check your credit report free of cost and repercussions. It is important to do so and apply to correct any issues and errors you find. Errors are common and corrections are also often done when requests are legitimate.
- Not knowing what all gets featured on a credit report: Many do not know that even applying for a loan that gets rejected, hits the credit score. That’s just an example of many other things that make up the credit score.
Here’s a link you could use to understand how to improve your credit score.
Are No Credit Check Loans Faster?
Credit check is just like any step of the loan approval process – it takes time. When one step is skipped, time is saved. However, there are other things that need to compensate for what the credit check does. Being a short term loan, these are typically steps that do not take much time, hence No Credit Check loans still tend to be faster.
The other thing that makes these loans faster in general, is that they’re non-bank direct lender loans. Their processes seem to be simpler and quicker in general but this of course varies from lender to lender, and so does the speed and consistency of loans disbursement.
We have a few suggestions that can help you get loans quicker, if that’s what you need:
- Keep all the documents and details ready while applying
- Provide complete information and try to ensure it’s all easy to verify
- Provide good quality scans of documents when applying online
- Ready reviews about your lender to understand if they’re fast at processing loans
- Apply for only as much as you know you can really repay and it’s likely that the lender would make similar assessments and process you loan so you don’t have to reapply elsewhere and waste time that way.
How Much Costlier are these Loans?
Loans and their mathematics are not designed to be very easy to understand. It’s hard to compare the usual bank and credit card loans with the non-bank direct lender loans which come with APR disclosures and simple interest while the former typically charge compounded interest.
In the simplest of terms, what I can say is that in less than a year’s term a significantly higher APR loan shall have a significantly higher cost irrespective of the type of interest being charged. Beware of loans that charge interest monthly – these shall have a many times higher APR (which is Annual).
Being very short term loans, No Credit Check loans have a high rate of interest but if your loan term is short enough, the final amount you end up paying quite a small amount at times. The only real way to know how costly a loan really is, is to find out the final cost.
One piece of advice here is to stay totally away from loans that you may fail to repay on time. Loans get very expensive if you cross the stipulated repayment schedules.
When should one avoid No Credit Check Loans?
No Credit Check loans are higher cost loans which are intended for emergencies and other sudden needs. These are also essentially short term loans which are not intended to be designed as a replacement for bank loans or other conventional loans like home loans, car loans, etc. They have their benefits but used wrongly, they can be very expensive and damaging too.
While it is virtually impossible to make an exhaustive list of every situation in which such loans should be avoided, here are a few which should help understand the idea well:
- When you’re in a long term need: It’s simple – do not take a high interest rate loan for a long period of time. It will be more expensive than is reasonable. These loans are intended to be short term loans and even the idea of repeatedly renewing them to use them for a long term could be disastrous.
- When bank loans are available and can serve you: If you’re not in too much of a hurry and bank loans are available to you, it should not be a problem to choose that option – they would tend to be less expensive. However, if what you specifically need is a very short term loan, you may have to do the mathematics to understand what’s less expensive.
- When your credit history is great and there are other quick enough options available: There are other quick loan options out there. Some banks offer pre-approved loans to their long term customers, which are fairly quick. If credit history is not a problem in your case, you must first consider those options which may come at a lower cost.
- When you find a lender whose offer seems illegitimate: Some lenders can be hard to verify for legitimacy. Sometimes the offer and their missing online presence should be a giveaway and it’s good to look for safer, genuine lenders while taking a non-bank direct lender loan. I share links of a trusted lender at the end of this article.
One of the reputed and experienced direct lenders offering such loans is CashAmericaToday. You can check out these pages to find their longer term online installment loans with no credit check and shorter term online cash advance with no credit check.
