A loan is a debt offered by a bank or financial institution to an individual. It is offered at an interest rate and is available in various types. However, most loans are granted based on a borrower’s credit history or for collateral. Then there is the ‘No credit check’ loan which makes it feasible for people with a bad credit history to avail of loans.
The no credit check loans are provided without any credit check whatsoever. Such a loan is best suited for those individuals who have a bad credit history or are not sure about their credit history. The interest rate for no credit check loans is higher than the interest on regular loans.
How Does A No Credit Check Loan Work?
As mentioned earlier, no credit check loans work best for people with a bad credit history or a low CIBIL (Credit Information Bureau Limited) score.
In such a type of loan, the lender does not check the credit score of the borrower. He directly grants the loan with no requirement for a credit check. However, the interest rate for no credit check loans is surely higher when compared to the normal loan schemes. Most lenders just require proof of income to grant the loan.
Listed below are the features of the best no credit check loans guaranteed approval:
- The loan is granted with disregard to one’s credit history.
- Quick loan approval (Usually within 24 hours).
- Higher interest rate.
- Flexible tenure period for repayment of the loan.
- Mostly available for higher loan amounts.
Listed below are the main benefits of no credit check loans:
- No need for an impressive credit history
- Quick approval
- Less documentation and paperwork.
- No need for collateral.
- No risk of loss of possession of an asset.
- Fixed interest rates.
- Highly flexible schemes. The borrower will be allowed to borrow higher amounts and enjoy higher tenures to repay the loan at his/her convenience.
- There is a higher chance of approval for no credit check loans compared to traditional types of loans.
- It will help you in maintaining your credit score.
While banks and financial institutions do not offer ‘no credit check loans’, they do offer loans that can be availed with a bad credit score. A secured loan is the best alternative option to no credit check loans. A secured loan will make it possible for a borrower with bad credit to avail of a loan. Moreover, it will help the borrower to build a good credit score. Every bank and financial institution offers secured loans.
These types of loans are granted based on collateral or security. Here, the borrower pledges an asset as collateral to the lender. A secured loan is beneficial to both the borrower and the lender as the borrower gets a large loan amount and flexible tenure periods and the lender receives fairly high-interest rates and can take possession of the pledged asset in case the borrower fails to repay the debt.
There are various types of secured loans such as mortgage loans, car loans, home loans, business loans, and loans against fixed deposits. So, read the offer documents carefully and choose the best no credit check loans guaranteed approval that best caters to your financial needs.