Canadians struggle with enough debt that there were 9,784 insolvency filings in November 2022 alone. That number is 17.5% higher than a year before.
Only a few have looked to one of the major areas that could help them; their credit score. 50% of Canadians have never requested a report from the country’s two major agencies, Equifax and Transunion. 11% who did believe they have a bad rating. No-credit-check loans could have helped them avoid insolvency.
Have you ever been in need of emergency money? You may have desperately searched, “what is a no-credit check loan?” It’s a loan that doesn’t involve a hard check of your credit score or a review of your credit history. You’re accepted or denied based on other factors such as employment status, income, bank account history, or collateral.
No-credit-check loans have certain benefits, such as letting you borrow without a high credit score, hard inquiry, or mountains of paperwork. They also may come with issues such as high interest rates or fees.
Read on to learn how to choose the right no-credit-check loans for you.
Consider The Different Types
Bad credit is not the same as no credit, and a bad credit loan is not the same as a no-credit-check loan. A bad credit lender may still do a hard check, which can hurt your score.
There are several types of loans where you won’t get any checks at all. Picking the right one for your needs is your first and most important choice.
Payday Loans
Emergencies happen every day, and they may drive you to need a payday loan. It’s a small, short-term loan meant to hold you off until you get your next paycheck.
You’re usually expected to repay the loan back in a few weeks. Be aware that they have ARPs or Annual Percentage Rates up to 400%, leaving you on the hook for more than you lent for.
No-Credit-Check Installment Loans
A no-credit-check installment loan lets you borrow a lump sum of money. You’ll repay it over a set time with fixed monthly payments.
The amount you can borrow is typically larger than payday loans. That means you can use them to cover almost any expense.
Car Title Loans
Yes, you can even get a car loan with poor credit. The amount you receive depends on the value of your car.
The title is used as collateral on the loan. You can drive freely once you repay it but, if you default on it, your car may be repossessed. You’ll also have to pay an APR of about 300%.
Choose a Lender
The second most important choice you can make after what type of no-credit-check loan to get is deciding which lender to go with. Find one that offers the one you need for the right amount at a reasonable price.
Reputation
Go online to determine the lender’s reputation. Read reviews to see what past customers thought of them.
Look out for any scams. The Better Business Bureau should have the information you need about the reputability of any lenders you’re considering.
Interest Rate
Your credit score is the primary factor when determining your interest rate. The lowest rates are reserved for customers with scores of 720 or higher.
You expect interest to be higher in no-credit-check loans. If a lender’s rates seem too good to be true, look elsewhere.
Compare as many lenders as possible. Look for ones that look beyond your credit and consider factors such as your job history or education.
Loan Term
When you need money immediately, you may not be thinking of the future. Thinking ahead is important with loans, even if you only need them to pay off a single bill.
Keeping the term short means you’ll pay larger fees but less interest. A longer term has the opposite effect. Decide what’s best for you and your budget.
Loan Amount
Each lender has their own cutoff. They’ll only allow borrowers to take up to a certain amount, regardless of their credit score.
Look at your budget to determine how much you need. Make sure that the lender can give you enough in a no-credit-check loan.
Fees
Many lenders charge application, prepayment, and origination fees. These shouldn’t disqualify them because they may be a worthy tradeoff for benefits such as low interest rates.
Make sure you know the entire fee schedule the lender charges. Find out what they expect for large or returned payments.
Extra Services
Lenders know that offering extra perks or features is the best way to set themselves apart from the competition. They may create extra features or technology that make it easier to manage and repay your loan, such as:
- Credit score monitoring
- Credit reports
- Online privacy protection services
- Mobile apps
These aren’t dealbreakers, but they could help you choose between one lender and another.
Apply for a No-Credit-Check Loan
Apply for prequalification from every lender you’re considering. You’ll get a glimpse into their rates via what’s called a soft inquiry. It won’t hurt your credit score but will help you make the right choice.
Send an application and wait to see if you qualify. They’ll send you all of the final paperwork before the loan is confirmed.
Be prepared by knowing what type of information they’ll expect. You may need to provide identification such as your:
- Name
- Address
- Date of birth
- Social Security number
- Proof of income
- Bank statements
- Pay stubs
Asking for these documents is standard practice, but stay away from any lender who asks for money upfront. You should also avoid ones that aren’t clear about all their fees.
Learn Where to Get No-Credit-Check Loans
No-credit-check loans can be your savior when you need emergency money that you may not get approved for based on your credit score.
Choose the right type to get you out of whatever financial hole you’re in and find a reputable lender who offers it. Apply for prequalification and look out for signs of scams.
Easternloans is a convenient alternative to regular Canadian financial institutions. Contact us today to get the money you need fast.