Before passing a loan, financial institutions generally choose people with decent credit history. In case you haven’t connected yourself with the credit banking system, you should build up your credit score. To achieve that, you can either get a low limit credit card from your bank or opt for instalment payments. On the contrary, if you have defaulted your earlier credits, lenders may feel hesitant to loosen up the treasury for you. If you fall into the latter category and are looking to get a loan for yourself, you may not want the lenders to check your credit history at all. This is where loans with no credit check come to the rescue.
Just like other types of loans, one must fulfil the basic requirements to be granted such loans from a bank or an online lender. These include the age limit of at least 18 years, a residential certificate of the United Kingdom, and proof of his or her salary or even self-employment details to reflect a steady income source. The lenders need this information to have a certain amount of reliability of loan repayment. So, let us take a look at the top 4 features of the no credit check loans, how you can get the best out of them, and what you should keep in mind while applying for them.
1. No Credit History Investigation
As the name suggests, No Credit Check Loans ensure that the lender doesn’t have to check your credit history. This makes everyone satisfying the basic criterion eligible for this type of loan. However, on the other side, the lenders decide the terms of the loans. More or less, irrespective of your history, if you agree to pay an agreed amount of interest, your loan’s approval chances increase as soon as your collateral is checked clear.
2. Save Time – Cut Short the Paper Work and Approval Duration
Loans with No Credit Check have a small but flexible tenure but the best part is the least amount of documentation process it involves. Along with a reduced amount of paperwork, the approval process is also comparatively quicker than other loans. In case you have any confusion regarding the process or any other nitty-gritty of any type of loan, you must consult the respective bank executive or the concerned financial adviser.
3. Choose Wisely – Fixed and Floating Interest Rates
Although the interest rate is higher due to the risk involved for the banks, many lenders give you an option of getting a fixed interest instead of a floating interest rate. With a fixed interest rate, you can strategize your loan repayment as any fluctuations in the market or bank policies doesn’t affect your interest rate. However, while applying for any reputed lender, you must ensure that you are properly calculating the monthly instalments well-before submitting your loan application.
4. Zero Penalty Prepayment Option Availability
In case you have applied for a floating interest rate and you want early loan foreclosure because of the uncertainty of interest, most of the lenders can help you avail those benefits without paying any extra penalty. However, you need to ensure the availability of this option along with information related to the processing charges being offered by the lender prior while you search for your lender.
Types of Loans with No Credit Check
Apart from the aforementioned points, there are multiple types of loans which do not require credit check including education loans and secured loans. Since students don’t have a credit card history, education loan can be approved by the lender if one has enlisted in a registered institution. Along with that, he or she needs to have a reliable guarantor who can assure the loan repayment as soon as the registered borrower passes out of the college or university. Other than that, secured loans require one to have a collateral as a financial security. Although it is the last option, in case one is unable to pay back, the asset or property mortgaged can be sold by the lenders to get their loan back.