Loans are designed to help people in their difficult times. When anyone applies for any kind of loan, the financial institution first checks an individual’s credit score. The credit score is a criterion to check whether the person can repay the loan amount after a specified period or not. Generally, people with low credit scores need to face great difficulty finding the lender to acquire a loan.
Lenders hesitate to provide loans to people having bad credit scores because, in such cases, there is a high risk of default on payments. But now, No credit check loans are specially designed for individuals with low or no credit score. In addition, it is a secured loan, so the individual needs to provide collateral security like gold, property, or any other financial security for taking such a loan.
How did no credit check loans work?
No credit check loans are the particular kind of loans introduced for people having a low credit score. In this type of loan, the lender doesn’t check the credit score of an individual because it doesn’t affect your loan. Generally, the interest rate in this type of loan is higher than any other loan because a higher risk is involved in debt repayment. In addition, many lenders usually require income proof as a basis to grant loans to the individual.
Some basic features of no credit check loans are as follows:
- Quick approval of the loan
- Readily available for higher loan amounts
- High-interest rate
- The loan is granted if even the borrower has a bad credit score
- Flexible tenure period
Is it suitable for people having bad credit scores?
The people are having bad credit scores find much difficulty in taking a loan. Most of the lenders don’t grant loans to people having a bad credit history. But in No credit check loans credit check loans, the lender doesn’t give importance to the credit score of the borrower and grants loans with a high-interest rate. Of course, no credit check loan is suitable for individuals having bad credit scores because it will help them to make payments in their difficult times.
What are the benefits of no credit check loans?
- Grant higher loan amount
- Fixed interest rates
- Less paperwork and documentation
- Quick approval
It comes with great flexibility as the person can borrow a high amount of loan with a higher tenure period, making it convenient for the borrower to repay the loan.
Which lenders offer no credit check loans?
If you have a bad credit rating, it is advisable to pledge collateral security as it decreases the risk associated with the loan amount, increasing your chances to avail loan.
Besides banks, two other options to avail No credit check loans are as follows:
P2P websites are available on the web that provides you bad credit loans up to the amount ranging Rs. 5lakh with a tenure of 1 yrs to 5 yrs, to make it convenient for the borrower.
Non-Banking financial companies
Many NBFCs provide loans to people having bad credit scores with higher interest rates.