Tuesday, January 15, 2008

How to Get a No-Credit-Check Personal Loan


A no-credit-check personal loan may be a good solution for individuals looking to pull themselves out of debt. This is a type of loan in which the lender does not investigate the borrower's credit history before agreeing to the loan terms. Many people use no-credit-check personal loans to get out of credit card or other short-term debt, in effect consolidating debts owed to various creditors.


Difficulty: Moderate

Get a No-Credit-Check Personal Loan

Things You'll Need

  • Loan cosigner (may be needed)



Step One

Use a no-credit-check personal loan only if you're faced with a short-term financial emergency you have no other means of meeting. For example, if your vehicle needs repairs you can't afford and your car is your only means of getting to work, consider a no-credit-check personal loan. If you just want something like a new bedroom set, getting a no-credit-check loan probably isn't the best idea.

Step Two

Navigate the dozens and dozens of online lenders who loan money to people on a no-credit-check basis by comparing not just interest rates but also repayment terms. Get familiar with the term "APR," which stands for "annual percentage rate." This is the amount of interest your loan will accrue each year for each $100 borrowed--the lower the APR, the better.

Step Three

Expect that a no-credit-check loan will come at a significantly higher interest rate than a regular bank loan. Because you're not required to pass a credit check or offer collateral, a no-credit-check personal loan is frequently used by lower-income individuals to cover financial emergencies. Since the borrowing terms are so flexible, the lender covers their investment in the borrower through inflated interest.

Step Four

Watch for lenders who slap huge late fees on missed or tardy payments. This is a common strategy lenders take with no-credit-check personal loans. You may also be asked to bring a cosigner in to cover you if you default on the loan.

Step Five

Consider the terms being offered by the various lenders. You want to choose the lender offering the best combination of an affordable interest rate and flexible repayment terms.

Step Six

Keep your loan term as short as you possibly can. Personal finance experts recommend that you avoid borrowing on a no-credit-check basis for loan periods exceeding 5 years.

Step Seven

Contact your lender without delay if you are facing any problems in your loan repayments. If you work with the lender, they might even assist your situation by lowering your monthly payments until you can get back on your feet.

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