No credit check loans are real, but there are clauses and conditions attached to it. To be able to understand if a no credit check loan is indeed beneficial on your end, continue reading this post.
There are personal loans that do not require a credit check. However, no credit check loans can be costly, requires a higher interest rate and may require additional details on your contract terms.
Higher interest rates, additional fees, and other clauses may be included in your personal loan compared to a loan application that would go through the usual process of credit checking.
There are a few personal loans you can apply for without having to worry about a credit check in Australia. However, they may require stricter requirements and will look into your income source more, due to the lack of a credit check. Here are some of the options available for you.
A payday loans has a maximum credit limit of $2,000 and can be paid anywhere from 3 months to a year. Establishment fees starts at 20%, monthly fees starts anywhere from 4% and your interest rate might be twice as your loan amount.
The bad thing that comes with a payday loan is that some clients end up getting another payday loan just to keep up with the payments of their current payday loan. It would really be ideal to think very seriously about trying out this loan option and the possibility of getting strapped with debt.
A secured personal loan requires a collateral or insurance you can offer to your lender. If you fail to repay your loan, your collateral could be seized and will be sold by your lender to be able to secure an amount to repay your loan.
Some lenders will approve you a personal loan without having a form of insurance or collateral you can offer to secure your loan. However, since the risk of losing money is higher for your lender, your application will undergo a strict check on whether your current income can indeed repay a loan. Higher interest rates are also applied to riskier loans such as this one.
Although personal loans might be a good idea for those small emergencies or situations that may solve your immediate needs for cash, it does come with steep interest rates.
No credit check loans are for real, but it has negative consequences in terms of fees and high interest you’ll have to shoulder for to be able to repay your loan. Think twice before applying for one. Avoid being cash strapped and trapped in debt.
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