It is possible, usually with personal loans, to apply for a no credit check loan. Anyone can apply for one of these loans if they find a willing lender. However, people who apply for these loans typically have a bad credit history they want overlooked.  

If you are in this situation and need access to some extra cash, your potential lender will not access your credit report. Instead, they may evaluate the past three months of your bank statements. You will have to have a regular income for one of these loans to proceed, and the details of this borrowing activity will still be listed on your report. There are positives and negatives attached to these types of loans that need addressing before you consider applying.  


What is a no credit check loan? 

As stated above, applying for a no credit check loan means that your lender will not reach out to the credit bureau for a copy of your credit report. Instead, your lender will consider your circumstances and evaluate your potential instead of reflecting solely on your past.  

Typically the lenders who oblige no credit check loans are independent. This means you will, most likely, not be able to obtain one of these loans through the big banks and prominent lenders. No credit check loans are also only offered for small amounts. As your lender will be making a potentially risky transaction, it is unlikely that you will be approved for any large personal loans.  


What are the advantages?  

So, why do people take no credit check loans? Well, most obviously, they are a way for people with bad credit to access more funds. For some people, taking one of these loans can be a second chance. If you are rebounding from a low point in your life, and are trying to boost your credit score, then successfully borrowing and repaying will look good on your report.  

Another advantage is that no credit check loans are typically quite fast. It is possible to place your application with a lender, receive approval and have the money in your account within 24 hours. This can be quite useful if you’re taking this loan to pay bills or cover an emergency when you’re low on funds.  

If you have recently gotten a job and can prove you have been managing your savings well, a no credit check loan may be an excellent option for you. You also won’t have to specify what you will be using this loan for. Once the money is in your account, you can use it for whatever you’d like.  


What are the disadvantages?   

As with everything, however, there are always cons on the flip side of the pros. Unfortunately for this type of loan, the negatives outweigh the positives. The most prominent is that these lenders typically raise their rates to account for this risk. The exact rate will depend on the lender you use and, often, on how risky you are as the applicant.  

Such high rates leave plenty of room for you to slip behind on your repayments and end up paying far more than you initially intended to. If you can even pay it off. As the people who take these loans are usually struggling with money, these loans can be detrimental.  

This can then domino into you failing to repay and requiring another loan to pay off the initial one. This leads to a troubling debt cycle. Therefore, if you intend to take such a loan, you should be incredibly conscious about whether you can or cannot afford to repay it quickly.



Other options available to you  

If you require more cash, there are always other options available. If you feel a no credit check loan is your last option, please do not apply. In this situation, using one of these loans will only worsen your situation.  

Regardless of your circumstances, it may be a good idea to explore all the options available to you before choosing a no credit check loan. If you’re going through a rough patch, consider seeking help from the government if viable. There are some hardship grants you may be able to apply for in some circumstances.  

If you are just having a tough week and have some caring family members, see if you can get a helping hand up for a short period. As long as you’re grateful and help them in return further down the track, there is no shame in asking for help.  


Your final alternative, if you aren’t desperate, is waiting longer before applying for a loan. Time is the best tool for fixing your credit report. This is not a viable option for most people, as they need money fast. However, if you can afford to delay whatever you require the cash for, for at least six months, this may be enough time for your credit to improve.