What Are No Credit Check Personal Loans?
When you need money fast, a no credit check personal loan can help. Read on as CU SoCal explains the pros and cons of loans with no credit check.
While most lenders require a credit check before loaning money, as its name implies, a no credit check personal loan doesn’t require that your credit history or credit score be looked at as a measure of your creditworthiness.
Loans with no credit check may require that you do show proof of employment or proof of income in the form of a bank statement. Some lenders may even require that the borrower put up collateral (such as a car or item of significant value), so if the loan amount isn’t paid in full, the lender will seize the collateral.
At Credit Union of Southern California (CU SoCal), we’ve provided low interest personal loans to Southern Californians for over sixty years, and we’re loved by our Members for our remarkable services and affordable fees.
Even if your credit history isn’t perfect, don’t worry, because unlike a traditional bank, we don’t think that your credit score tells the whole the story. Come in and talk to us and let’s see what we can do!
Call CU SoCal at 866.287.6225 to schedule a no-obligation loan consultation, or apply online for a personal loan today!
Get Started on Your Personal Loan!
Why You Should Avoid No Credit Check Personal Loans
Individuals who need money in a hurry and have been turned down by traditional lenders due to bad credit often turn to a personal loan without credit check as an alternative.
Although loans with no credit check are easy to get through online lenders and other companies, these loans come with a high interest rate and other risks:
Expensive: No credit check lenders typically charge high interest (up to 400%). Before you sign, ask what interest rate you’re getting and what the monthly payment will be, in including any fees.
They Don't Help Your Credit Score: Some no credit check lenders do not report your monthly payments to the credit bureaus—so even if you make your monthly loan payments on-time, you’re not getting the benefit of having this good credit behavior added to your credit history, thus boosting your credit score. This will again make it harder to get loans in the future.
Your Debts Can Quickly Add Up: If you aren’t able to repay the loan on-time, you will pay hefty fees. Some lenders will give the option to roll the unpaid debt into a new loan at an even higher interest rate. Borrowers who end up in this situation get trapped in high-interest debt and lose more money in the end.
More Likely To Be Scams: Because many no credit check lenders are online, there’s more of a risk of fraud and other predatory lending practices. Before you provide personal information about your bank accounts, do your research and talk to a representative at the company. There are also anti-fraud and scam resources available from the
Consumer Financial Protection Bureau.
Some no credit check lenders do have a good reputation, so be sure to do your research to find the best option.
No Credit Check Personal Loan Alternatives
To avoid the high interest rates and risks associated with no credit check personal loans, here are some other options:
Payday Alternative Loans: Mycreditunion.gov explains that to provide credit union members with an alternative to high-cost payday loans, the
National Credit Union Administration (NCUA) allows federal credit unions to offer small-dollar loans called PALs. The borrower must be a member of the credit union for at least one month. A federal credit union can charge an application fee only in the amount needed to recoup the actual costs associated with processing the application, up to $20. PAL amounts can range from $200 to $1,000. The loan term must range from 1 to 6 months. Up to three PALs may be granted to the same borrower during a six-month period, as long as no PAL overlaps or is rolled over.
Co-Signed Loan: A co-signer is another person who also accepts full responsibility to pay back a loan. For people with no credit history or bad credit, having a co-signer makes it easier to get a loan. Having a co-signer on a loan gives the lender additional assurance that the loan will be repaid. The co-signer is obligated to pay any missed payments and even the full amount of the loan if the primary borrower doesn’t pay.
Credit Unions: Credit unions are not-for-profit organizations that exist to serve their members. Like banks, credit unions accept deposits, make loans, and provide a wide array of other financial services. But as member-owned and cooperative institutions, credit unions provide a safe place to save and borrow at reasonable rates. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates.
Nonprofits, Charities and Religious Organizations: Community and religion-based organizations offer resources including food banks, clothing donations, and emergency housing options. Many can help locate work opportunities and apply for financial assistance.
Explore Options to Pay off Bills: Consider a debt consolidation loan (available at credit unions and banks) that can be used to pay off or pay-down large outstanding balances and high interest credit card debt. With this type of loan, you can pay-off bills at a lower interest rate, freeing up money to use on other expenses, saving hundreds of dollars each month in interest payments.
Paycheck/Payroll Advances: Some employers offer a payroll advance policy that lets them pay employees in advance of their usual payday. Payroll advances often come with a fee, so be sure to ask about the terms and conditions.
Family and Friends: Borrowing money from a family member or friend can be a quick way to get the money you need if you don’t qualify for a loan from a bank or credit union. While borrowing from family or friends can be tempting, it’s important to create a document stating the conditions and duration of the loan and whether or not you are expected to pay interest, and if so, at what rate. You and the family member or friend should agree to the terms and sign the document. Loans from family and friends have emotional attachments that could negatively impact your relationships.
How to Improve Your Credit Score
If having bad credit and a low credit score is preventing you from getting approved for credit cards and loans, there are steps you can take to raise your credit score.
Improve your credit score with a CU SoCal
Credit-Builder Loan. Taking out a credit builder loan helps people establish a credit history and improve their credit score. Start by applying for a CU SoCal share certificate for $1,000. Although you do not receive the funds upfront, you receive $1,000 cash after 12 months of successful payments.
Your payments are then reported each month to all three major credit bureaus. This process helps build a credit history if you don’t have one and increases your credit score (as long as you make your Credit Builder payments on time and meet any other debt payments that you may have).
After successfully making payments for one year, you receive $1,000 cash.
Learn more about
How to Rebuild and Improve Your Credit Score.
CU SoCal Personal Loans
CU SoCal is helping Southern Californians get the funds they need to pay for life’s necessities. Our personal loan features include:
- Financing from $500 to $30,000
- Rates as low as 2.50% + Share Certificate Rate
- Terms up to 120 months for the lowest possible monthly payment
- Line of credit option for access to funds when you need it
- No application fee
- No prepayment penalty
- No funding fee
Get the details on CU SoCal Personal Loans.
Why Savvy Consumers Choose CU SoCal
For over 60 years CU SoCal has been providing financial services, including car loans, personal loans, mortgages, credit cards, and other banking products, to those who live, work, worship, or attend school in Orange County, Los Angeles County, Riverside County, and San Bernardino County.
Please give us a call today at 866.287.6225 today to schedule a no-obligation consultation with a personal loan representative.
Open an account today!
Get Started on Your Personal Loan!