Before taking out loans no credit check, check out whether or not you can pay the loan on time. Borrowers seem to think that they can just get a loan for whatever reason. It’s a bad idea to apply when you are not sure you can pay it off. All the more you need to be extra wary about loans no credit check.
Just what are loans no credit check? One of the requirements that lenders need from borrowers is their credit score. In the US, credit bureaus use the FICO score as the basis for checking a potential borrower’s credit score. When the result of the credit score is not favorable for the lender, they will not approve the borrower’s application. Loans no credit check, borrowers don’t have to worry about their credit score if they are going to apply. There are various lenders that provide this kind of feat. Which is music to the ears of who are in need of a loan to help whatever financial problems they have.
You might not be aware yet, but lawmakers have been cracking down on practices that are harmful to borrowers, especially the ones coming from car title lenders and payday lenders in the recent years. This is the reason why these lenders have migrated into offering installment loans since it offers longer term in repayment. But this shift does not mean that they have also changed their way of doing things, according to experts. They even call these methods as the “payday installment loans.”
The dangerous side of these loans is that it comes with excessive interest rates that are sometimes 200% higher and lenders do not examine the borrower’s ability to pay back. There are only two requirements for a borrower to qualify, which are the bank account and the regular paycheck. The reason for this is because lenders withdraw the borrower’s payments electronically and in a relentless manner, too. It would go beyond the point wherein the borrower might have halted writing up the checks if only the payments were under their control.
Loans no credit check may seem like a good thing, but with high-interest rates, they maybe harmful to borrowers in the long run.