Getting a loan has never been easier. There are so many banks and credit companies offering to lend money, that when one bank refuses it’s easier to find another one that will give an approval. The different types of loans available vary. Some are very strict on credit checks while others not so. Both have their pros and cons. No-credit check loans have become even more popular, but just because they don’t do a credit check doesn’t mean they’re a good alternative to traditional lenders. There are a number of factors that need to be considered, and the pros don’t necessarily outweigh the cons.
Pros of Quick No-Credit Check Loans
Bad credit rating, no worries. Regardless of your credit history you are able to borrow money. If you’re spending and repayment habits have changed for the better, this is a great way to rebuild your credit history. However, if you’ve got a bad credit rating, and are taking out another loan which you are going to have difficulty paying back, than it’s not the best idea.
Quick and easy. When you apply for a no-credit check loan you save lots of time. As there is no credit check needed, your loan is approved at a much quicker pace. No more waiting for days and weeks for a loan approval, with no-credit check loan it can be done in a matter of hours, even minutes.
Ideal as a short term fix. If you’re short of cash before pay day hits, the no-credit check loan can become your friend, especially when you are indeed going to pay it off the moment your pay hits your bank account. The interest rates are usually higher so it’s better to pay them off without delay.
Cons of Quick No-Credit Check Loans
Think interest rates. The lender is taking a higher risk by not checking your credit history. If you take out a loan with no-credit check than it’s likely that your interest rate will be higher. The higher the interest rate, the higher your repayments will be.
Deeper into debt. No-credit check loans sound fantastic, especially if your desperately in need of cash but if you’re already into debt, than your asking for trouble. Maybe the loan is for consolidation to make your repayments easier, but if you’re taking the easy route of getting another loan, you’re only getting yourself deeper into debt. No-credit check loans make it much easier to get yourself into debt because they’re easily accessible.
Only small amounts. When credit companies offer no-credit check loans they have to protect themselves against borrowers who are going to have a hard time paying them back. That’s why no-credit check loans are usually for a small balance. A few hundred or a few thousand dollars. That may not be enough for your needs, but it might be enough to cause you financial strife.
Debt isn’t a good idea. If you need to apply for a no-credit check loan then the best advise is to reconsider whether you should be taking out another loan. Bad credit rating? Well then taking out more debt is rather silly especially if you’re already paying other debt off. No-credit check loans are a good solution to short term financial woes, but only if they are used smartly and paid off as soon as possible. If you can’t get a traditional loan, than maybe you shouldn’t be getting a no-credit check one either.