Guaranteed Loans with No Credit Check

There’s only one reason you don’t want lenders checking your credit as part of a loan application – your credit stinks. Really bad credit guarantees really expensive loans.

So if you want guaranteed loans no credit check, you’d better be prepared for the consequences. It’s not an exaggeration to say that taking on this kind of debt could take a bad financial situation and turn into a total personal finance nightmare.

I’m convinced that the majority of people who take out any sort of guaranteed approval personal loan have no idea what it could do to them long term. The interest rates are so high that you can end up paying back two or three times the original loan amount within just a few months. This isn’t a house we’re talking about. It’s an unsecured loan you’re probably borrowing to pay some utility or medical bills.

Even if you are able to pay back the loan on time, this kind of financing has been proved to be habit forming. I read a government report that said the majority of short-term borrowers (ie payday loan situations) use this kidn of financing multiple times.

So let’s say you take out a $1,000 guaranteed approval loan that costs $100 in fees and interest. You pay it back in two weeks. You wouldn’t be out of the ordinary if you did this five times in the course of a year. That’s $500 in interest and fees paid on…nothing! You didn’t borrow money for any kind of appreciating asset. You borrowed money to keep your lights. Yes, you need lights, but they shouldn’t be paid for with a triple-digit interest loan.

How to Avoid this Type of Loan

It’s simple, really. The only time people borrow money this way is when they’ve run out of cash and have pressing bills. The simple solution is to have an emergency fund in the bank. Yes, conventional wisdom say says you should have six months worth of expenses in the bank, but that’s a ludicrous number for most people.

If you maintained a small personal slush fund of even $1,000 you’d probably save yourself from ever having to borrow awful payday loans again.

It won’t be easy to build up your $1,000 reserves, but if you take a long term view you can get there. Work a few hours of over-time. Do some odd jobs for friends and family. You will be amazed how much better you sleep at night with a little rainy day fund in the bank.

No Credit Check Signature Loans

Applying for any kind of loan becomes a bit of a chess match doesn’t it? You and the lender sit across the table from each other – you’re looking to get as much money as possible while sharing as little information and paying as little interest as possible. The lender wants to lend money – as much money as they profitably can. They just want to make sure all that money gets paid back. So whether you want a small signature loan with no credit check or a full blown $5000 loan no credit check, you better know how to put the lender at ease about your ability to repay.

Do you realize you’re asking quite a bit of the lender? You’re saying you want to borrow hundreds or thousands of dollars a) with no collateral or security on the money they’re risking with the loan, and b) you’re hoping they won’t want to take a close look at your credit history and track record of making timely payments on previous debts.

Here’s the challenge: you wouldn’t be seeking unsecured loans no credit check – signature or otherwise – unless you had something to hide in your past borrowing behavior. That’s where things get a little sticky. You tell the lender you’re hoping to secure a signature loan without a credit check, he immediately jumps to the conclusion (and probably rightfully so) that you’re actually seeking a bad credit signature loan. And that may not be a loan his bank is interested in giving.

Here’s the best advice I can give you. There’s one thing you might be able to use to get a lender to offer you a personal signature loan without credit check: a huge pay stub. Actually, a series of large pay stubs. All a bank cares about is recovering the money it lends out, plus a reasonable interest rate. If you can show them you’ve got income that far exceeds the payment that will result from the loan they give you, they MIGHT be willing to let you go without digging into your credit history.

Getting a bank to approve guaranteed signature loans is going to be tough sale because they’re only going to consider the amount of money you make as it relates to all your debt payments, not just the payment associated with the loan they’re about to give you. So you may be back to square one.

Unless…you’re willing to borrow a standard, run of the mill payday loan. All most payday loan lenders require is a pulse, a bank account with direct deposit, and proof of income. But are you really sure you want to go down the path of borrowing payday loans? It’s an awfully slippery slope.