Here’s a picture for you: you’re sitting in front of your new Mercedes, staring at a broken windscreen that seems to have appeared there overnight. Was it there before? Did someone threw a rock at it while you left it parked there? It doesn’t really matter anymore; all you know is that it’s going to cost you a fair amount of money to fix it.
This might, however, be fairly problematic if you don’t have the resources to pay for it. You know that the bank may not give you a loan on such a short notice, particularly if your credit score is down the drain. This means that your only option is a no credit check loan.
Still, before applying for no credit check loans, you need to keep several things in mind.
- Steer Clear from Payday and Title Loans
If you have bad credit, chances are that you are already struggling with your payments – and you don’t have a lot of money to begin with. For this reason, you should steer as clearly as possible from payday loans – mainly because they are very expensive.
Both payday loans and title loans have very high interest rates and are expected to be paid back over a short term. Most lenders ask you to pay it into just one slump – making it very difficult on the borrower. Sure, they don’t check your credit – but it will burn you in the long run.
- Make Sure They Check Your Ability to Pay
They might not care about your credit; it’s all in the past, you can be a different person now. Still, they do have to check your ability to pay back what you borrowed. After all, they made an investment in you – and if they don’t check on you, it means that they are counting on you defaulting. This way, it can become very profitable to the lender.
- Make Sure They do Soft Credit Inquiries
Not all credit checks are bad; a soft credit in will only give general information on you – and most importantly, will not appear on your credit report. A soft inquiry is most of the times good, because they’re checking whether or not you can pay the loan.
- Defaulting Will Still Hurt Your Credit
The initial credit check will not appear on your credit report – but that doesn’t mean you are in the clear. If you default on a no credit check loan, the collectors are very likely to report your mistake to your credit bureau – therefore putting another black spot on your credit.
- Consider Your Option
Don’t stay with the first option you get; instead, try shopping around for options. Every lender will see you as a different risk level – and will provide you different rates. Stack up some offers and choose the one with the lowest rate possible.
No credit check loans are not the end of the world. You just need to know how to pick them in order to make it work for you.