Think about this scenario. You’re standing by your car staring at it with a rather forlorn expression on your face. It has a rather ugly dent on it. You have no idea where the dent came from or when it occurred because, as far as you can remember, it wasn’t there this morning.
What you know for sure is that fixing that dent is going to cost you money, and you don’t have that money at the moment. You’re going to have to take out a loan to finance the repairs of the dent. By the way, did I mention that your credit score is about 590? You certainly can’t get a traditional bank loan with a credit score like that. The bank will want to check your credit score, and we already know they are not going to like that.
That means you’re going to have to go for a no credit check loan. Sounds easy enough, right? Well, before you rush to get one, here are a few things you should know about this type of loan.
1. You Can Get a Payday Loan
Before you go looking too far, the first and quickest option you have is to go for a payday loan. These loans are excellent for people who need a fast loan and have bad credit. The loan is unsecured so that you don’t have to provide any kind of security. All you need to provide is a post-dated check for when your salary comes in. That said, there are plenty of payday loans in San Antonio with no credit check into which you can look.
2. The Lender Should Check Your Ability to Repay the Loan
This is something a lot of lenders don’t do. It’s one of the reasons why many short-term loans are dangerous. Even among payday loans, only the most scrupulous lenders will make sure to check your ability to repay.
When you take a traditional unsecured loan, the lender risks losing their money if you are unable to pay back the money. That’s why it’s important for them to check that you can, in fact, repay the money.
However, with no credit check loans, the most unscrupulous lenders are counting on you being unable to pay back your loan. When you can’t pay the loan, they roll it over and charge you more interest. The longer you stay without paying your loan, the greater the interest for the lender.
So, if you notice that your chosen lender doesn’t seem to care if you can pay back the loan, you’re probably dealing with a predatory lender.
3. There’s Nothing Wrong with a Soft Credit Check
Just because a lender wants to check your credit score doesn’t mean they won’t approve your loan. Also, if it’s nothing more than a soft credit check, then the check will not feature in your credit report.
Soft inquiries aren’t like hard inquiries in that they don’t require too many details and won’t show up on your credit report and hurt your credit score. At the very least, a lender who wants to do a soft credit check is checking your ability to repay.
4. You Shouldn’t Default
Even if you’re taking out a no credit check loan, you will still see a negative impact on your credit score if you default on it. The lender could report your late payments or nonpayment to a credit bureau, or they could sell your debt to a debt collection agency, which could report your debt to a credit bureau.
5. Take Your Time to Look Around
A loan is a product like any other. You should, therefore, shop around for a bargain, just like you would do with just about any other product. Lenders offer not only different rates but also different products, some of which may be ideal for you.
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