How To Get a No Credit Loan

Introduction

No credit loan is a loan that does not require credit check. Before passing a loan request, every bank or lender performs a number of credit inquiries like borrower’s payment history, debt levels and number of accounts he holds. The result of these financial statistics is known as credit score of a person. Due to perceived risk associated with loan seekers with a low credit score, they are turned down by most money lenders with a traditional mindset. Even if the request for financial products like insurance, mortgage, car loans and credit cards of such loan seekers is passed, their interest rates they are charged with are unreasonably high. No credit loan is, therefore, especially useful for people who have a bad credit rating or no credit history at all.

 Here are a few steps that will help you get a no credit loan.

Step 1

Step #1: Decide the type of loan

No credit loan can be of two types- Secured and unsecured no credit loans. Let us evaluate the both types for advantages and disadvantages.

Secured loans are provided against collateral which can be personal assets like car, house or some property. If the borrower is unable to pay the loan, collateral is seized by lender. However, since the lender is insured, the interest rates are low and re-payment period is long.

Unsecured loans do not have any collateral. Though this is beneficial for the borrower, due to higher risk for the lender the interest rates can be significantly high and re-payment period is expected to be short.

Step 2

Step #2: Check your alternate credit

For higher lender confidence and lower interest rates, you need something called an alternate credit. If you are current with your monthly rental payment, car loan, telephone bills or payment of other utilities, lender may find you more reliable.

Step 3

Step#3: Select a program

There are many government as well as private programs giving out no credit loan. For example, USDA Rural Housing Guaranteed Loan program is a government mending program tied to the federal USDA mortgage loan program. There are mortgage lenders like FHA who are willing to give you loan on benefit of doubt. Check your options thoroughly, do some background checks on potential lenders and pick the one that suits you best.

Step 4

Step#4: Loan application

Application for a no credit loan is processed very fast and sometimes the money is transferred in your account or reaches you hands in less than hour.

Step 5

Step#5: Be wise

Now that your no credit loan is approved and money is in your hands remember to use it wisely to get back on your feet. You should have a strict re-payment plan and adhere to it. Avoid requesting no credit loans and credit cards you cannot pay back.

Conclusion

No credit loan applications are processed in less than an hour. Some people who have a good credit score also opt for no credit loan when they need a loan quickly and want to avoid long waiting period associated with traditional loan methods.

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