Getting a personal loan without a credit check can be difficult, but there are options available. Unfortunately, many of these loans have high interest rates and fees, which can make them poor choices for most borrowers. If you know where to look and can qualify based on non-credit information, however, you might be able to get a personal loan with favorable terms.
Check Your Credit Report and Score
Before you rush to a lender that offers no credit check loans online up to $5,000, it is a good idea to check your credit. If you have never done this before, you might find you have a credit report and credit score that qualifies you for a personal loan. You can request free copies of your credit reports from the three consumer credit bureaus at various websites. You can also get a free based on your credit report. Without checking your credit and taking your income and other debts into account, a lender’s gauge of your ability to repay the loan isn’t as sharp. A no-credit-check lender may also require access to your bank account for automatic withdrawals.
Some lenders don’t review your ability to repay very closely and pull the money straight from your account on the due date, knowing that you may need to return and borrow more later. No-credit-check loan amounts range from $100 to several thousand dollars, and borrowers typically make equal, fixed payments over months or years. But sky-high interest rates on these loans make them harmful in the long run.
Lenders do not all use the same scoring models or necessarily check all three of your credit reports, so the score you see may not be the same one that every lender uses. Still, many lenders use a Score to evaluate new credit applications, so seeing your FICO® Score can give you a good sense of where you fall in the credit score range.
If you do not need a loan right away, taking time to establish or improve your credit scores may make sense. If you check your through agency, you will get personalized suggestions based on your unique credit history.
Where to Get a Personal Loan with No Credit Check
Some people look for personal loans without a credit check because they have no credit. Others know they likely will not be approved if there is a credit check because they have poor credit. It’s an important distinction.
Personal loans are often unsecured loans, meaning they do not require collateral. As a result, lenders generally want to review your financial information, credit to make sure you can afford to repay the loan, and that you have a history of paying your bills on time. Lenders that do not require a credit check often make up for this lack of information by charging borrowers high interest rates or fees.
For example, payday loans and high-rate installment loans might not require a credit check. Alternatively, if you own a vehicle or valuable property, you may be able to get an auto title loan or pawn loan without a credit check. However, these should be last-resort options as their high costs can make them difficult to repay, often resulting in a cycle of borrowing at astronomical rates.
However, there are increasingly new and better options for people who have no credit score. In these situations, lenders may focus on other information, such as your relationship with the company, employment history and debt-to-income ratio. Many of these options do not require good credit—or any credit at all—but the lender may try to check your credit. In some cases, having no credit may be better than having poor credit.
How to Apply for a Personal Loan
The application process for a personal loan can vary depending on the lender and the type of loan. Some lenders have streamlined online applications with systematic instructions you can follow. With others, your best option may be to call or visit a local branch and speak to a loan officer.
While there might not be a credit check, you may still have to prove your identity and income, and provide other documentation. When preparing to apply for a personal loan, you may want to gather:
- A copy of a valid government-issued photo identification
- Recent pay stubs or other proof of income, such as recent tax returns
- Your employment history and contact information for your employers
- Recent bank statements
- Education history
- Personal and professional references
- How to Establish Credit When You Have No Credit History
If you do not have a credit history, establishing your credit and building a good credit could be helpful. Even if you do not want to take out a loan or get a credit card, good credit can make it easier to rent an apartment or get a job. In many states, your insurance premiums may also be impacted by your credit history.
You may know you have a credit score—and likely several scores—but do you know how your scores are calculated? Your credit score may seem like it’s the result of a mystical mathematical formula, but the factors that go into calculating your credit score are pretty straightforward.
Bills from providers of phone, utility, cable TV and streaming services also may affect your payment history. In the past, these accounts would only influence your credit if they were sent to collections because of non-payment, in which case they will stay on your credit report for seven years and negatively affect your score.
Today, these accounts can actually help improve your credit score, through Boost. With Boost, you can allow us to securely access your online payment history for phone, utility, cable TV and certain streaming service providers. Then, on-time payments on authorized accounts will start showing up on your credit report, and your Score may get a boost. Because payment history is the most important factor in your Score, paying all your bills by the due date can go a long way to helping you build a positive credit history over time. To ensure your payment history and other aspects of your credit are in good shape, check your free credit score from agency and regularly review your free credit report.
Once you’ve established your credit, be sure to manage your accounts to build good credit. Making all your debt payments on time and only using a small portion of your credit limit on credit cards are important ways to improve credit scores.