Jul 26, 2009
No Credit Check Loans - Can You Get One?
No credit check loans are something that many Americans are trying to get during the current recession. Many credit scores have greatly decreased and borrowers do not want to go through the hassle of even having their credit checked because it is likely to be disheartening. It is also the case that many individuals who are hoping to borrow do not have a sufficient amount of credit built up to even make a difference on the interest rate.
Ultimately, the reason we build our credit score is to help lower the interest rate on any personal loan we get. If credit has not been built, the lender of the money has no historical evidence that you are going to pay the loan back. This is considered a huge risk which is exactly why lenders give those with no or very bad credit scores such a high interest rate. If you do get a no credit check loan, you might be looking at an interest rate well above 20%.
Just because you have no credit does not mean that you cannot get a loan. The loan you do get will have a very high interest rate, but the interest rate does not matter if you are able to pay the loan off in a timely fashion. It is very similar to credit cards. If you can make full credit card payments each and every month you will not have to worry about paying ANY interest so it doesn’t matter if you have a 50% interest rate.
With that in mind, you will pay interest on a loan because the main reason you took the loan out is because you didn’t have money. If you work diligently to pay the money back on that loan immediately, the interest that accrues is not going to be nearly as significant if you make the minimum payment each and every month.