No-credit-check personal loans exist, but they’re typically very expensive. You might be drawn in by promises of fast cash, but you should look elsewhere first.
Once you’ve resolved the immediate need that has you considering a no-credit-check personal loan, try to slow down and take a closer look at your financial picture.
“Whatever made you get in that situation where you needed this no-pull, you have to treat those conditions that caused it,” says Randy Vera, member of the digital product development team and senior counselor at American Consumer Credit Counseling.
[Read: Best Personal Loans.]
What Is a No-Credit-Check Loan?
A no-credit-check loan is typically a small sum of money that you can obtain without the lender checking your credit score.
You’ll find a lot of variety in this space. It includes storefront pawnshops that loan you money while they hold onto something valuable of yours as well as online payday lenders that promise cash in just a few easy steps.
Payday loans and title loans are illegal in some states, so be sure you know your state’s laws when researching no-credit-check loans.
Types of No-Credit-Check Personal Loans
Borrowers looking for no-credit-check personal loans might also consider buy now, pay later services, which can involve soft credit checks and come with their own pros and cons.
Credit card cash advances can also provide fast access to cash, and you can borrow up to a preset credit limit without undergoing a new credit check. But you’ll be charged high fees and interest rates.
With these products and others, make sure you closely review the terms and conditions. You’ll want to understand fees, rollover options and whether the activity will be reported to the credit bureaus.
[Read: Best Bad Credit Loans.]
Are No-Credit-Check Loans a Good Idea?
No-credit-check personal loans aren’t a good idea if you have another option that lets you meet your financial needs on better terms.
Beyond the general pros and cons below, individual products come with their own quirks. For example, you’re not legally obligated to repay pawnshop loans. You’ll lose your property if you don’t repay them, but you won’t hear from debt collectors.
Pros of No-Credit-Check Personal Loans
— Speed. No-credit-check lenders can provide cash quickly, which you might need in an emergency.
— No credit check. If you have no credit or a poor credit score, you may struggle to qualify for traditional lending products. This can increase the appeal of no-credit-check products.
Cons of No-Credit-Check Personal Loans
— Bad terms. No-credit-check loans often come with significant fees and short repayment windows.
— May risk collateral. If you don’t pay back your title loan or pawnshop loan, you could lose your car or other property.
— Small loan amounts. No-credit-check loans are typically small-dollar loans, though title loans can net you more funds, depending on the value of your vehicle and other factors. These types of loans often won’t be much help if you have a larger financial need.
[Read: Best Debt Consolidation Loans.]
Alternatives to No-Credit-Check Personal Loans
Slowing down when you urgently need funds may not sound appealing, and understandably so. But some immediate steps can help you avoid expensive loan products.
Once you’ve resolved the funding need that has you looking at no-credit-check loans, you can take some medium- and long-term steps to get you in a better position for the future.
If You Urgently Need Cash
— Look to local organizations. “If you really need money, there’s organizations you can reach out to. Look for your local not-for-profits and local philanthropy,” Vera says. “There’s churches, there’s all kinds of ways, if you’re really in trouble.”
— See if you can qualify for a better deal. If you need to borrow just a small amount, some reputable mainstream lenders, including credit unions, offer small-dollar personal loans. If you’re concerned about getting money as fast as possible, same-day personal loans are also available with more reasonable terms. You’ll have to qualify for these loans, and eligibility requirements may include minimum credit scores and minimum incomes.
— Ask for extensions or payment plans. If you’re looking for a loan because you’re at risk of falling behind on bills, you should contact whoever issued the bill. Your utility company, creditor or other organization might be able to offer you an extension and/or a payment plan that helps you avoid additional debt.
When You Have More Time
— Check your credit reports. Access your credit reports for free at AnnualCreditReport.com. You should identify and dispute any mistakes, as these can affect your credit score. “Mistakes do happen, things come up on credit reports that don’t even belong on credit (reports), especially if you have a pretty common name,” says Danny Ashton, certified credit counselor with Advantage Credit Counseling Service.
— Work with a nonprofit credit counselor. Consider a nonprofit credit counseling service to get help with budgeting, debt management and more. “Get a second sounding board that’s not in the soup with you,” Vera says.
— Consider opening a secured credit card. Opening a secured credit card and making on-time payments can be a helpful step toward getting your credit score on track. You’ll typically put down a deposit that is equal to your initial credit limit. With a stronger credit score, you’re more likely to qualify for lending products with better terms.
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Can You Get a Personal Loan With No Credit Check? originally appeared on usnews.com
Update 03/27/25: This story was previously published at an earlier date and has been updated with new information.
