It’s never been easier to apply for a loan. You can fill out an application online or over the phone and have your funds sent within 24 hours.
So why would you need to submit a credit check? To find out if this is possible, we spoke with Orville L. Bennett of PaydayDaze.com.. “Lenders are more likely to offer loans without requiring a credit check when they feel confident that other factors will make up for the lack of traditional credit history,” he says.
Your Credit Score Matters
But Not to the Lender When You Apply for a Loan. As far as lenders are concerned, your credit score doesn’t matter when you apply for an installment or payday loan. The only information they need is proof that you’re over 18 and can pay back what you borrow in 30 days (or two weeks with most cash advances).
Of course, this may not be possible without good credit. “Installment loans require borrowers to make monthly payments,” says Bennett. “For many consumers who have low-income levels and bad credit scores, there’s no way they could afford making these fixed payments.”
They also don’t want to lose money on their interest rates by approving too many costly applications from people who aren’t going to repay them.
“If you can’t pay back the loan on time, there are consequences. The lender will charge a late fee and report your delinquency to credit bureaus.” If these costs outweigh any monthly payments or interest rates they stand to make, lenders may not approve an application.
This is why it’s important for applicants with bad credit scores to explore their other options before applying for loans without them.
…So Get Your Free Credit Score Before Applying
The only way you’ll know if you’re approved for a loan is by getting your free credit score first. It takes just five minutes and gives lenders another good indicator of how likely borrowers are to repay their debts within 30 days (or two weeks).
“Lenders want some assurance that the applicant will be able to pay back their loan,” says Bennett. “It’s also important for consumers to know that there are certain payday lenders who don’t require a credit check.”
Turned Down Because of Your Bad Credit Loans
Bad credit loans can be a good option. If you’re turned down for an installment or payday loan because of your credit score, it doesn’t mean that all hope is lost.
You may be able to get approved if you have other factors in your favor: steady income and employment history, proof of residency or citizenship, and absence of active bankruptcy proceedings against the applicant. “Bad credit loans can be a good option,” says Bennett. “It’s possible to find lenders who will approve applicants with bad credit scores so long as they meet the lender’s standards.”
If there aren’t any cash advances near where you live, take out online installment loans insteadthey don’t require physical storefronts as traditional installments do.
As always, we recommend checking with lenders directly before applying. “It’s important for consumers to do their research,” says Bennett. It can help them get approved and avoid any costly late fees or interest rates that end up making the loan even more expensive than it would have been in the first place.”
The Risks when you decide to take out loans with a poor credit rate
If you’re considering taking out a loan with a poor credit rate, we recommend only doing so in an emergency. “
Those without good credit scores should take note of the risks,” says Bennett. If they can’t pay back their loans on time, they could end up paying costly late fees and interest rates that make it even more difficult to repay the debt within the allotted period.”
These consequences are especially severe if borrowers don’t have steady employment or regular income levelsthe lender may not be able to recover its costs through monthly payments alone and will instead choose to report delinquency (or worse) to your local court system where creditors like bill collectors might get involved.
…But Getting Loans With Bad Credit is Possible
There are several options for consumers who need to get approved for bad credit loans without a credit check. “It’s possible to find lenders willing to approve applicants with low FICO scores,” says Bennett. “They want some assurance that the applicant will be able to Frepay their loan, though.” If you’re having trouble getting approved by traditional installment or payday lenders, try applying online instead where there aren’t any physical storefronts involved in the processit can help simplify it and decrease your chances of being turned down because of your poor credit score!
Make sure you have all necessary documents before submitting an application
To make things easier on yourself when trying to get fast cash through payday advances or other types of high-cost loans, always make sure you have all the right documents on hand before applying.
“Many lenders want proof of citizenship or residency in addition to a steady income and employment history,” says Bennett. In some cases, applicants may also need to submit documentation proving that they are who they say they aremake copies beforehand so everything goes smoothly!
Finding the Right Loan
The best way to get the cash you need is to research different lenders and compare their rates. “It’s important for consumers looking to take out a loan with bad credit ratings to do their homework,” says Bennett.
Make sure they’re doing business within state-regulated parameters and aren’t charging borrowers more than what would be considered fair under local laws.
After all, payday loans should primarily be used as short-term solutions in times of emergenciesif your lender charges unreasonably high-interest rates or other fees, it might not make sense financially.
” When you find yourself in this type of situation though, remember that there are still plenty of options available even if traditional installment or payday lenders won’t approve you!