SimpleDirect allows all borrowers to see their personalized rates without impacting their credit scores. This is what is called a soft credit check. It is true that credit checks have traditionally been the number 1 criteria that banks check before determining anybody's loan rates. However, it isn't the only way to get loans.
Why do banks check your credit score? Essentially, it is an indicator of how much they can rely on you to pay back the borrowed amount. This score is built upon years of your credit history which shows if you've missed any payments, if you've defaulted any commitments, or how leveraged you are as a whole.
Today, lenders realize that many people haven't had an opportunity to build a credit score. As such, they have introduced alternatives to the typical credit report. Here they are:
Some lenders use bank statements as an indicator of your financial activity. They will see if you have lots of withdrawals, deposits, and if you have any overdrafts.
Rather than checking on your past, as shown through the credit history report, some lenders just want assurance that you are at a position today to make payments for a given loan.
So, they will want to ensure that you have enough stable inflows of cash coming in. How do they do this? You may be asked to present a document like a pay stub or a employment contract that provides a proof of employment along with the income amount.
This one's simple. If the lenders can be certain that in the event of your failure to make timely payments, an ownership of some type of tangible property belonging to you will be transferred to them, then they will have successfully mitigated their side of the risk.
Keep in mind, however, that the collateral has to be close to the value of the loan. Common collaterals used by people include their vehicle, computers, a home appliance etc.
This type of loan has gained a lot of popularity in the past few years. Essentially, if you find yourself with a bad credit or without any credit history at all, a guarantor serves as someone who takes personal responsibility over you and your ability to make the required loan payments.
Guarantors are also called 'co-signors' to the loan and these individuals are typically people with good to excellent credit, and a high income. Guarantors take on a personal risk here in that if you as the borrower fail to make payments on the loan they co-signed on, they are personally liable to make these payments themselves. As such, guarantors are typically someone within your family or close group of friends.
As we've suggested already, these loans are great for people looking to get on their feet or start off freshly.
With SimpleDirect, our lending partners provide borrowers with the funding within 1-3 business days from application.
For many this isn't an issue as family or friends are more often than not willing to help out. But, it is a con that they are exposed to risk as well.
Nobody enjoys having to place a piece of property as collateral.
If you are unable to provide guarantors and settle for something like payday loans, then you can expect to pay higher interest rates.
As we can see above, like any other type of loans, loans with no credit check have their own set of pros and cons. So, it is important to understand what they really are and then determine if this is the best route for you. With SimpleDirect, you can check your personal rates without any impact to your credit score.
You may have seen payday loan ads in your local TV station or perhaps even in the strip mall next door. These lenders are what we call "high-risk high-reward" businesses where they offer you a seemingly too-good-to-be true loan within an hour of walking into one of their stores. But this comes with a big cost: HIGH INTEREST. According to reports, payday loans require such absurd fees that they be equivalent to around 400% APR.
These lenders offer loans in return for putting up your legal ownerships of your vehicle as collateral. These lenders typically allow borrowers to take out loans at a value of around 35% of the car's value.
Typically, family and friends don't check your credit (we think?). But, as a lot of us have been taught, it is risky to mix money and family! You don't want to ruin relationships.
While lenders do look at credit scores, having a bad credit score doesn't necessarily mean you will get no loan at all. You have many options for urgent loans with bad credit. Our top three choices are just a selection of what’s available. So how do you choose?
|Lending Partner||APR||Loan Amount|
|5.99 - 35.99%||$1k - $50k||Apply Now|
Questions to ask yourself:
Why do you need the funds? Do you need them immediately? Do you need a high loan amount? The answers to these questions will narrow down your options.
Each lender charges different APRs and origination fees. If there is an origination fee it comes out of the loan proceeds. For example, if you borrow $5,000 and there’s a $500 origination fee, you’d receive $4,500 in hand.
Each loan has a different repayment period ranging from 2 to 5 years in most cases. The shorter the loan term, the lower the APR, but the higher the payment. Make sure you take a loan you can afford.
There are some credit card options such as Secured Credit Cards, or even some introductory credit cards that look to loan to borrowers with low credit scores. Take a look!
|Credit Score Range|
|Excellent (741-850)||See My Options|
|Great (721-740)||See My Options|
|Very Good (701-720)||See My Options|
|Good (681-700)||See My Options|
|Average (661-680)||See My Options|
|Fair (641-660)||See My Options|
|Poor (621-640)||See My Options|
|Very Poor (350-620)||See My Options|
|I'm not sure||See My Options|