There are many reasons you might find yourself in the position of bad credit. Whether it’s due to poor payment skills in the past, or an unforeseen circumstance that cropped up and set you back financially, it happens to the best of us. However, on the of the biggest downsides is that a low credit score can make it harder to take out a loan.
Most traditional lenders will take a look at your credit score before assessing whether you are worth taking a risk on. Or you can go down a completely separate route and look into a no credit loan. Read on to discover exactly how do no credit check loans work?
What Are No Credit Check Loans?
Just as the name suggestions, this is a type of loan you can apply for where the lender won’t request to see your credit file or take a look at your credit history. Sounds too good to be true, right? Instead, they will look at your bank statements and consider your income and expenses to determine your reliability and likelihood to be able to pay back the loan.
Rather than looking at your borrowing history, lenders take a simple look at your recent financial history, giving you a better chance of taking out a loan. So, how do no credit check loans work?
How Do No Credit Check Loans Work?
Wondering exactly how do no credit check loans work? The process is exactly the same as taking out any other loan, your borrowing history simply won’t be looked into. Here’s how to apply for one:
- Choose a lender that offers no credit loans and approach them about taking one out. It’s important to realise that while your credit report won’t be checked, it will be noted that you have applied for a loan. This action will be listed on your credit report.
- Make sure you are eligible. Without a credit history to look into, the lender will take a look at your financial position as it stands. This means you need to be able to prove that you have a regular income. Most lenders will request access to at least 90 days of bank statements so they can look at the money coming in vs the money going out to determine what financial position you are in and whether you are worth taking a risk on. Their aim is to gauge how likely you are to be able to meet the conditions of the loan and pay it back in the agreed timeframe.
- You will also need to provide details of any other liabilities you have, this can include other outstanding loans or credit card statements.
- Other than your bank account details, you will also need to have your driver’s license, Medicare number and utility bills on hand when you are applying for a no credit loan.
- Once you have all this information gathered, you can approach a lender that offers these types of loans and try your luck.
The Benefits of No Credit Check Loans
While we have looked into exactly how do no credit check loans work, what exactly are the benefits that come with taking one out?
- Instant access to cash: you can take out small, short-term loans to help you out and tide you over between payments.
- Save time: many lenders offer no credit check loans online, which saves you plenty of time in the process. You just fill out the details and provide all the required documents.
- Straight forward: the process is very straightforward and can usually be carried out in a short amount of time. This means you have the money even faster.
- High approval rates: most people are able to meet the eligibility standard so your chances of being approved for the loan are high.
- Helps build your credit score: one great thing about this type of loan is that it can actually help to build your credit score, making it easier to get loans in the future.
Types of No Credit Check Loans
When it comes to taking out no credit check loans, you are generally limited by the options available to you. The most common type of loan is a payday loan. These are short-term loans that can tide you over between paydays. You are often required to pay it back before your next payday.
You can choose between a secured loan, which involves you putting up an asset against the loan to keep the interest down, or an unsecured loan, where the lender takes on all the risk and usually charges a higher interest rate.
Get Your Loan Today
How do no credit check loans work? Get in touch with Clean Credit today and we will help you out. Our professional team will get you on track with your own no credit loan.