Do you have a bad credit rating? Are you tired of going from lender to lender, begging for a loan? You now have a feasible solution to your problem. With the increasing demand of people asking for loans, lenders have now started processing applications without looking at the borrower’s credit rating. This type of loan is referred to as a no credit check loan. The downside to this is that not all lenders will be willing to follow through with this policy. Even if you have declared bankruptcy in the past seven years, the lender will be able to lend you money. There is a small catch to the whole system, and it is that the interest rate on your loan will be high.
Getting bad credit loan
Lenders always prefer to deal with borrowers who are reliable, i.e.: those who have a good credit rating. If you have a good or fair credit rating, the lender won’t hesitate to lend you money, at a fair interest rate. On the other hand, when you have a bad credit rating; you are a risky borrower. Since the lender fears that you may default on the payments, they would have to charge you a larger interest on the total loan.
A no credit check was created mainly to help those with bad credit ratings, to get a loan. If you have a bad credit history, you know how hard it can be to get approved for a loan from a financial institution. By skipping the credit check process, loan officers will be able to grant you a loan for the amount demanded. When it comes to loans in general, there are two common types of loans. The first once is known as a secured loan, while the second is an unsecured loan. We will discuss the differences between these two levels below.
A secured loan allows you to put up collateral when asking for a loan. By putting up collateral, you will be able to lower the interest rate on your account. Collateral can be considered as a down payment which you pay up front, which tells the lender you are trustworthy. It is always a good idea to go with a secured loan. However, if you have nothing to put up as collateral, you will be forced to opt for an unsecured loan. An unsecured loan requires no collateral, and you will simply get approved for the loan. The only thing will be that, your interest rate will be higher than usual.
A loan with no credit history check can be arranged for different purposes, such as for personal, business, home or auto purchase. Applying for such a loan is just the same as applying for a regular loan. The application is very straightforward and the forms are filled out the same way. The only difference is that in the end, the lender will not pull up a credit report. The form will ask for personal information as well as employment information. The lender would need to know, how you will be able to pay back the loan.