The importance of having and maintaining a good credit history is that one can easily get loans without much hassle. The case is very different if you have a bad credit history.
In such a case one is tempted by the constant offers of lenders who are willing to lend you money with no credit check or employment verification. Such loans may be an easy option but have way too many strings attached to them.
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Loans With No Credit Check
No credit check installment loan is one which lies between pay day loan and the traditional personal loan. Since the recurring cases of malpractices in pay day loans, lawmakers have been putting an end to these sorts of loans. So, now lenders have moved from payday loans to installment loans that have a longer repayment term.
A payday loan is where the borrower is expected to return the loan amount on his next pay day as a complete lump sum. In the installment loan, the payment is made in small amounts that are spread out over months or years. The amount can vary and can be anywhere between a few dollars to thousands of dollars. The borrower is expected to make equal and fixed payments every month. In such types of funds, credit history does not matter, and despite having a bad credit history, one is eligible to apply for such loans.
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Loans with no credit check or bank account differ from traditional bank loans as banks, and other credit unions keep a borrower’s credit history in consideration before lending money. There are of course other ways to get a loan if you have bad credit(https://askopinion.com/how-to-get-loans-even-with-bad-credits).
Things To Keep In Mind
One needs to be careful when going for loans that do not require any credit check and should ensure that they do not face the following problems:
#1. High- Interest Rate
Loans with no credit check may look too good to be true to many, and the simple reason for that is that often enough that is the case. The annual percentage rate of charge or APR on such credits is sky high, and often one ends up paying twice the borrowed amount in the form of interest.
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#2. Repeat Short Term Lending
These loans are easy to get and one does not have to go through much to borrow the money but that’s only because the lender does not care if you can pay back the amount. Such high-interest rates only mean that the borrower would not be able to pay back easily. In such a case lenders offer another loan with an equally high loan with which you can pay back the previous loan.
#3. Aggressive Debt Collectors
In case you are not able to make your payments and become a defaulter then you might have to face aggressive debt collectors. They will have no qualms harassing the lender, turning up at one's work place and even repossessing one's possessions. They might withdraw money from the bank account of the lender as well if the person is unable to make payments on the due date.
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There are innumerable scams that run under the name of loans. Though application fees do exist in such scams, these lenders would ask for the application fee right up front before lending the amount. Also, fees are disclosed by a reputed lender whereas in a scam the fee would be deducted without informing the borrower.
Do you also have a bad credit and looking for a way to get loans? Leave us feedback using the comment box below.
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