No Credit Check Loans
No Credit Check Loans
After a decade or more of easy credit lending, most traditional financial institutions have become much more demanding when it comes to documentation for those applying for a loan. There, the days of no credit check loans may well be over. This may simply slow down the process of obtaining a loan for customers with good credit. But what about the thousands of would be borrowers with less than stellar credit?
No credit check loans may be the only chance many of these individuals have at borrowing money. Having bad credit or no credit may in effect prohibit them from qualifying for a traditional loan requiring a credit check. At the very least it can make the process more difficult and may result in multiple requests from the lender for additional documentation which can mean delays and perhaps higher interest rates. Borrowers are often frustrated with the entire process.
Frustration need not be the norm. No credit check loans are readily available from other sources. Aside from the ‘credit check required’ banks, there are other legally available ‘no credit check loans’. For example, the state of Delaware has numerous Licensed Lenders. These are not banks, but rather organizations licensed by the state to lend money. Licensed Lenders are subject to both state and federal statutes. Many offer no credit check loans in various forms.
These no credit check loans can serve a vital need in the community. The unfortunate fact is that many borrowers using these financial products are not able to qualify for loans elsewhere. When faced with catastrophic circumstances one’s modern day survival may depend on access to cash whatever the source. Medical emergencies, eviction, utility turn offs and the like are serious situations. In such cases the advantage of no credit check loans is quite clear.
By no means however, are these types of no credit check loans advisable for everyone. The potential of becoming caught in a cycle of debt is one pitfall. This is due to the fact that many no credit check loans are expensive either in terms of interest or fees or both. Another issue is one of budgeting. No credit check loans are mostly designed as a short term product and not as a long term cash flow solution. This means that those without the ability to repay the loan in a short time may wind up paying excessive fees or face collections or repossession (in the case of title loans).
In summary, no credit check loans, while perhaps less prevalent in banks, remain a strong segment in the marketplace, especially for consumers with poor credit.