No credit check unsecured loans exist under the right conditions. Usually, you’ll have to take our a secured loan for that to happen, though. Personal loans without a credit check are much rarer, unless you take out a payday loan. I suggest you go another route.
When taking out a new line of credit, you have to a take a long term view of your debt situation. Getting a new VISA or MasterCard can be a legitimate temporary means for people with low income, or for those individuals with really unfortunate credit histories. Much has been said about predatory lenders in the media. Popular opinion tends to simplify issues down to their most basic arguments. Thus, the most common providers of no credit check personal loans (“cash advance payments”) might provide a valuable and much needed service to people who otherwise would have no access to a personal loan, though many of them are predatory. Again, while I recommend against cash advances from anyone but your credit card company, I’m not going to shame you if you go that route or say they are always useless. Be careful, though.
Before I go too much further, let me define my terms.
What Is an Unsecured Loan?
An unsecured loan is simply lending without putting up collateral. Credit card debt is unsecured. If you don’t pay, the most a company can do is report you to the agencies and ruin your credit rating. They can’t take your car or home or other possessions.
Other forms of unsecured credit exist, too. Payday loans are another example, though these are considered more dubious in nature.
A so-called “bad credit personal loan” is just like a conventional bank offered personal loan, in that it doesn’t require any physical collateral from the borrower. This is why this type of loan is also called a no-collateral loan. One difference between a bank issued unsecured personal loan and a cash advance loan is that a bank personal loan requires good credit; cash advances do not.
Instead, the interest rate is so high, they make enough off the reliable, paying customers that they can take the risk you or anyone else will default. In such a way, there are plenty of places to find unsecured lending. If you need fast cash and you have bad credit, or if you simply want to avoid the hassle of bank lines or requirements, these are available.
Many people will take on an unsecured loan in order to pay off old debts, as a kind of “stopgap” measure for debt payment. Old debts are not only a burden on your cash flow, but they are also often the main reason behind a person’s bad credit history.
When New Debt Can Help
If you do it right, you can do like a company does and make a “business decision” to acquire new debt. With a plan, this can be a positive. Without a plan, it becomes a debt spiral. An unsecured loan can mean a timely influx of cash to an individual in need. Believe it or not, these lenders don’t turn out the kind of huge profits that professional mortgage lenders often report. That is not to say that unsecured loans with no credit check are without consequences; that would be false. Still, responsible use of no credit check loans can build your credit and give you access to an emergency supply of income when you need it most.
Be under no illusions: the consequences of misusing these unsecured personal loans are pretty stiff. The penalties and fees associated with defaulted or unattended loans can quickly sink you into massive debt. You need to understand the gravity of the situation you’re getting yourself into before deciding to take on a no credit check loan.
On the other hand, you can use these loan arrangements to take care of an emergency need or unexpected period of low income. For instance, this kind of loan is perfect for gaining access to money when you need to make your car payment or car repair. Consumers shouldn’t rely on this type of borrowing for their day to day living expenses. At this point in your financial life, if you need a quick influx of cash to get back on track, it is in your best interest to be as financially frugal as is possible. All of this can be summed up in a few words — don’t take on high interest rate debts over the long term.
Paying off these loans on time will pump up your credit score. Don’t simply follow the payment plan of your lenders. Instead, create a proactive payout plan which suits your needs and lowers the interest payments as much as possible. You can achieve this in one of several ways.
Part of the plan needs to be consolidation of your various debts. Get a free credit report and examine your entire history to locate erroneous creditor comments. This is nothing you need a debt consolidation service to achieve. You can easily verify this information yourself, while disputing it with the credit reporting agencies. No one is going to defend your cause better than you will. Correcting errors is a case of patience and persistence.
The best way to consolidate is to pay off your smallest debts first. While some argue that paying off the biggest interest rate is best, I understand there is a psychological component to your finance issues. The better you feel about your finances, the healthier the actions you take are going to be. Pay off small debts first, which gives a sense of accomplishment and momentum towards a solution.
Negotiate the Money You Owe
Next, negotiate down your debts with your creditors. Remember, creditors want to clear their books and will be happy to hear from you and set new arrangements for paying back your debt. Even when you do get something removed from your credit report, it may take a month or longer to disappear. Remember that the bureaus do not answer to any consumer protection authority — they are all private businesses, so you cannot count on their in-house fact checkers to protect you. When you explore your report, you’ll be able to highlight and manage your financial weaknesses. Make use of a combination of non-profit debt counseling and budgeting tips to move towards a better budget situation. An overall smarter approach to your cash flow is not that hard and it gives you pride and confidence that you are doing the right things. Once you know you’re doing the right thing, don’t let bill collectors get inside your head and convince you otherwise.
Boosting Your Credit Score
The good news about no credit check loans is that you can start paying down your debt quickly, and thus boosting your credit score in a matter of months. Your payment arrangement will be made directly with the lender, essentially cutting through the lengthy arrangements that traditional, lower rate loans come with. Another benefit is you can qualify for payments of a thousand dollars or more without having to provide much background information. All you need (in general) is some form of proof of address, and a piece of information which demonstrates that you earn a thousand dollars or more every month — like pay stubs or bank account statements.
Avoid Late Payments and Defaults
Moving forward, avoid late payments and defaults. Lenders are wary of helping you out if you pile up a history of late or no payment. Paying off old debt could be the beginning of your new financial life, but only if you do not reinforce the old reports by adding new negatives to your history.
Do you follow pro tennis or golf?
ATP or WTA Tennis or PGA Golf have ratings systems for players, which go back either 1 year or 2 years, depending on the sports. Players rise through the rankings by besting last year’s results. If they got to the quarterfinals of the U.S. Open last year and get to the semifinals at Flushing Meadows this year, then they go up in the rankings.
Like the pro athletes, try to replace bad results with good results. Once you decide to build a better FICO score, you should determine yourself ever add bad results to your history again.
Who Qualifies for Such Loans?
Since you do not have to pledge anything for collateral, these loans can be secured by almost anyone. Usually, the loan only requires proof of adequate repayment capability of the borrower. Simple responsibility on your part should tell you that you need to have the ability to pay back any loan you take out, especially a high risk unsecured personal loan.
Make sure that you have some money saved up, or a solid job that you can depend on prior to applying for the loan. Regularly check all of your credit reports and your credit score for any inaccuracies or black marks, as lenders both for your upcoming unsecured personal loan and any lenders in the future will first evaluate your credit score in order to determine the interest rates and terms and conditions of your loan.
Who Should Take These Loans?
The sub-prime lending crisis should teach us that qualifying for a loan is no reason to borrow money. Just because someone offers you cash, you shouldn’t take it reflexively. There are always strings attached. But sometimes, it makes sense to borrow money.
Common uses of cash borrowed through personal loans include home improvement, education fees, weddings, debt-consolidation, and the purchase of a vehicle. There are endless reasons why you may need a sudden influx of cash, but these are the most popular. Good reasons exist, just as bad ones do. Remember that these unsecured loans should be short term loans — paying them off quickly and regularly will do more to boost your credit than anything else.
Before you take on an unsecured loan, look into the overall costs of the loan as well. Be prepared to borrow money at higher interest rates, because it’s the cost of doing this kind of business. The risks the lender is carrying are huge. But it is not just the rates that you should be wary of. Additional fee charges may be considerable, due to your credit circumstances. Analyze the whole line of credit.
Finally, be patient. Look around the financial marketplace. You don’t have to jump on the first unsecured loan you find. A Google search on personal loans will give you an overall view of prevailing rates on the loans for your circumstances. Make a list and compare as many offers as you can find. This way, you’ll be assured of finding competitive rates.Remember that you only have to make a deal if the terms are suitable to you.