Needing a loan without a credit check is the ultimate Catch-22.
Funds are generally most available and most affordable for those who’ve built a positive credit history and might not need this kind of loan. Everyone else risks not getting approved or paying astronomical interest rates (here’s looking at you, payday loans).
So what can you do if you need extra cash but don’t qualify for good rates?
Well, it might not be easy to get the money you need right away without some help from others or without paying high interest rates. But that’s not to say it’s impossible. Here’s a rundown of what to do if you need a loan without a credit check.
7 tips if you need loans without a credit check
Before we jump into the list, take a few deep breaths. It’s totally understandable that this situation is frustrating and stressful. But it’s best not to proceed with a solution until you know it’s one you can be happy with both now and later.
With that in mind, let’s look at some of your options.
1. Research affordable personal loans
If you have bad credit and are in need of a loan, chances are you think payday loans are your only option. But you should avoid payday loans as much as possible. They’re easy to get and hard to get rid of, thanks to annual percentage rates that can reach heights of 400%, according to the Consumer Financial Project Bureau.
There are, however, some options for more affordable personal loans — and you might not need to have perfect credit to get them. Here are a few personal loan lenders we work with and their minimum FICO credit score requirements:
As you examine your choices, only take out a loan you feel comfortable with. Don’t proceed if you can already tell the monthly payments will be tough for you to meet. And if the interest rate seems higher than what you think the new credit is worth, consider other options.
For some extra help, use this personal loan calculator to ensure you know what you’re walking into if you decide to take one of these loans.
2. Establish a relationship with a credit union
The reason it’s so hard to get new credit when you have a lower credit score is that lenders believe the behaviors that led to your current score will predict the future — a future of you potentially not making your payments.
You, of course, know that’s not a complete picture of who you are. That’s why, in these moments, it can be helpful to talk to a credit union. Credit unions don’t come with the convenience factor of big banks, but they do offer a more personal experience.
Credit unions want to get to know their customers and develop mutually beneficial relationships with them. If you were to open a deposit account at a credit union and start talking to them about lending options, you can at least have a decent chance of sitting down with someone to discuss your needs.
3. Ask a trusted confidant to co-sign
If you have anyone in your life that you trust greatly and that feels the same way about you, it might be worth asking them to co-sign a loan for you. If they have good credit, that could open you up to far better interest rates and approval odds than you might have on your own.
Be careful, though. If someone agrees to co-sign for you, and you default on the loan, you not only further damage your credit, you will cause damage to their credit as well. If you have any fear at all that the loan might be more than you can handle, don’t take this step.
But if you’ve already calculated what you can easily afford to pay and just need a co-signer for approval, this could be the option that works best for you.
4. Sell any assets you can live without
Do you have stock that’s not going anywhere? A car you don’t use? Computers, phones, or household items you’ve since upgraded? Try to sell them.
No, this isn’t a loan, but it could be a way to get the cash you need. Even if the sale doesn’t get you enough money, it can help you build up a savings account for future emergencies.
5. Work overtime or pick up side gigs
Like selling assets you don’t need, picking up extra money from working overtime or taking on a side gig could help you build the cash reserves you need to either avoid the loan or at least build up your emergency savings.
Even if this won’t help you quickly enough to avoid taking out the loan, it can help create some breathing room during tough financial times. This will be especially true when you get the loan and start repaying it.
6. Borrow from family
Let me start by apologizing for the obviousness and potential discomfort of this suggestion. But hear me out. Because if the only loan you can get is one with a super-high interest rate, it might be worth swallowing your pride if you have the kind of family members willing and able to lend you money in times of need.
As difficult as it can be to ask for help, borrowing money from a family member could mean avoiding interest altogether, or at least (hopefully) paying little in interest. You can even present them with a promissory note to show your commitment to repay.
7. If you can, wait until your credit improves
Finally, here’s an option to consider if you don’t need the loan in the next month or two: wait.
Why take on loans without a credit check that will likely cost more than traditional loans if you don’t have to? Depending on what’s happened to your credit, you might be able to repair it in just a few months. And when you do, you’ll have access to many more credit options — and more affordable ones at that.
Here are a few things you can do to start rebuilding credit now:
- Open a secured credit card and use it for small purchases. Pay off your balance on time and in full every month.
- Use all of your extra funds (or take on extra work to build extra funds) to pay down existing debt more quickly.
- Automate your bill payments so you can be sure you’ll never miss one or pay late.
- Review your credit reports for free at AnnualCreditReport.com to make sure there are no errors on them. If there are, dispute them.
Wondering why these steps will help to rebuild your credit? Take a look at this chart.
As you can see from this chart, two of the most influential factors of your FICO credit score are payment history and amounts owed. And the picture doesn’t look all that different for the VantageScore credit score.
FICO and VantageScore are the credit scores to watch, with FICO currently being more widely used.
According to myFICO, 90 percent of lenders in the U.S. use FICO credit scores when deciding to approve or deny someone for credit. And, since the top factors are the same for both scores, improving your credit doesn’t have to be an overly complicated task.
How to pay off the loan you end up with
So what happens if you end up getting a loan without a credit check? Start planning now on how you’ll pay it back.
Make a plan of action that includes earning extra money (if you need it) and creating a budget that lets you make at least minimum payments each month. As you chip away at your balances, you’ll build better credit over time.
With better credit, you might later be able to refinance your personal loan and avoid falling into the payday loan debt cycle.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|