Typically, traditional lenders will run your credit before even considering your application. However, there are title loans without credit check, which you may be glad to know. All you primarily need with those are a car in your name and income. Some other lenders consider alternative info, such as your banking history and income, to approve you. Here’s how to get a loan with no credit check.
Is a Personal Loan Possible Without a Credit Check?
Yes. It certainly is possible to get such a loan. However, your options may be limited and you may wind up paying exorbitant interest rates and fees.
If you have time, your best move is to hold off on a loan until you can improve your credit score, which reflects your payment history. You could apply for a secured credit card to improve your credit, for example, or ask a family member if they’d be willing to add you as an authorized user on their credit card.
If you don’t have time, try friends and family members for a loan. You can also get a payday loan but those generally have higher rates than car title loans, which may be the better choice for a short-term loan.
There are also online lenders that use alternative data — rental history and banking information, for example — when considering loan applications. Note, though, that even those lenders that accept alternative info may still want fair credit, a FICO score of between 580 and 669. Personal loan amounts may also be smaller for those with poor credit.
How These Loans Work
Most lenders who don’t pull your credit use your income and job status to qualify you. Such loans are commonly unsecured, meaning they don’t require collateral.
Traditional lenders use your credit reports and scores to assess your probability of repaying a loan. They then use their findings to assess your risk to them. With no-credit loans, the risk is usually offset by charging a markedly higher interest.
Applying for a Loan
It’s always a smart move to check your credit score before applying for any type of loan so that you have a better idea of what you may be eligible for. You can check your reports for free each year.
You should also only seek to borrow the amount of money you need. So figure out what that amount is. You also don’t want to accept a loan offer that’s less than what you need.
Whatever kind of loan you’re applying for, you’ll need to provide some documentation. So, be able to prove your income, identity, employment, and rent or mortgage history.
Now you’re ready to shop around. Before you officially apply, it helps to get prequalified to learn what interest rates you qualify for through various lenders. Do pay attention to origination fees, prepayment penalties, and other types of fees that can add to the loan’s cost.
Finally, you must figure out how much you can afford, in terms of monthly payments. The last thing you need is more financial pressure, which you may face if you take on debt with payments that strain your budget.
In Summary
By using lenders that use alternative information when considering applications, it’s possible for you to get a personal loan with no credit check. You’ll have to do your homework, though, and weigh the benefits and drawbacks of potentially high interest rates and fees. And remember that you can likely get a title loan without good credit.