Method 1Assessing Your Current Finances
- Obtain a copy of your credit report and score. These can be obtained once per year from each of the three credit bureaus: Transunion, Experian and Equifax. Their contact information can be obtained online at their websites or from the Credit Info Center.
- Your credit history is free but you may have to pay a small cost to get your actual credit score. Some banks and credit unions offer credit score information to their customers for free.
- Before going ahead with a no-credit-check personal loan, take a look at your credit score and see if you can benefit from a conventional loan with a lower interest rate. Lenders often charge higher interest for a loan without the lower risk involved in a solid credit score.
- Correct any errors on your credit report with the store, bank, etc. who originally reported the information. This could help to raise your credit score and qualify you for a conventional loan.
- You're considered to be a poor risk if you have a credit score under 620.
- Calculate your income and assets. For many kinds of personal loans that don't require credit checks, having assets, collateral or other means of proving the ability to repay will help to lower interest rates for your personal loans and help your loan applications go through. Assets and collateral include your house, artwork, a car, valuable stamps and coins, and jewelry.
- Type up your sources of annual income and your list of assets to present to potential lenders. Include any alimony, child support or social security benefits. Make a copy of last year's tax return as well.
- Ask about provisions for the self-employed. Many lenders offer less restricted personal loans tailored for self-employed individuals who are less able to prove income. These kinds of choices can also be solutions for people with slightly bad credit or need personal loans extended on other terms. Prepare a list of income received during the past three years and be ready to present three years of tax returns as well.
Method 2Finding the Right Lender
- Find a willing traditional lender. Not every bank or lender is in the business of offering personal loans without credit checks. Start by calling the local bank or credit union you normally do business with and if they don't offer this type of loan, expand your search to other banks in your area.
- Compare the interest rate offered on personal loans without credit checks. You may be able to find what appears to be a high-interest conventional loan, until you compare it to the interest rates on payday loans, cash advances, and title loans.
- Lower interest means less money out of your pocket over the term of the loan.
- Evaluate costs and fees. Many lenders charge significant fees for putting through personal loans without credit check requirements. Loan origination and other items may show up on your overall personal loan, folded into monthly payments. Look out for excessive fees and don't be afraid to walk away from deals that seem too expensive.
- Consider micro lending. You may be able to use internet micro lending services (also called peer to peer lending) to help you find loans for amounts under $35, 000. They may do a credit check, but this is only to set interest rates, not to disqualify you.
- Popular micro lending sites include Kiva, Prosper and Lending Club.
- Investigate a pawn shop loan. If you have anything of value such as jewelry, electronics, artwork, etc., you can bring it to a pawn shop and they will give you cash for what they believe it is worth. The merchandise is held for a specific period of time, and if you don't repay the loan on time they will sell it.
In lending agreements, collateral is a borrower's pledge of specific property to a lender, to secure repayment of a loan. The collateral serves as protection for a lender against a borrower's default - that is, any borrower failing to pay the principal and interest under the terms of a loan obligation. If a borrower does default on a loan (due...
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