No-Credit-Check Loans: Borrowing Options and Alternatives
A no-credit-check loan can seem like the only way to get cash fast if you have a low credit score or no credit history. But this type of loan may come with risks, including triple-digit interest rates and short repayment terms.
Before you borrow, learn why no-credit-check loans can be dangerous, how to evaluate this type of loan, and what safer alternatives may be available to you.
Nerdy tip: An installment loan may be a more affordable way to borrow money. These loans let you borrow the money all at once, then repay it in fixed monthly payments over a period of months or years, instead of weeks. You won’t need to put up collateral, and loan amounts tend to be higher, while interest rates are usually lower. Lenders typically require a credit check to apply, but some specifically offer installment loans for bad credit.
What is a no-credit-check loan?
With a no-credit-check loan, the lender doesn’t review your credit history or credit score when deciding whether to give you a loan. Omitting credit checks is common at payday lenders and other companies that offer high-interest loans.
Your credit history tells a lender how you’ve handled debt in the past and helps them determine how likely you are to repay a new loan. Not knowing your credit history makes the loan risky for the lender, and many no-credit-check lenders balance that risk by charging sky-high annual percentage rates.
These loans are often a few thousand dollars or less and have short repayment terms of a few weeks or months, making them difficult to repay on time and potentially leading the borrower into a cycle of debt. Back to top
No-credit-check loan alternatives
If you need fast cash, you may be able to find alternatives to no-credit-check loans, such as local assistance, lending circles or family members.
But a low credit score doesn’t have to stand in your way if you want to borrow from a lender with affordable rates and responsible underwriting practices. Here are other loan options for borrowers with bad credit (FICO score of 629 or lower).
Credit union loans
Some credit unions offer small personal loans of $500 or more. To qualify you for a loan, they may consider information other than your credit score, like your history as a member. Many credit unions also have starter credit cards or loans to help you build a credit history. The interest rate charged by federal credit unions is capped at 18%.
Payday alternative loans
Known as PALs, these credit union-issued loans help small-dollar borrowers avoid the debt trap created by traditional payday loans. APRs on these loans are capped at 28%.
Buy now, pay later companies
“Buy now, pay later” companies offer to split a purchase into smaller payments over a few weeks or months. BNPL companies don’t usually do a hard credit pull, so approval may be easier than with a traditional loan. BNPL can be helpful for urgent expenses, but use it for one purchase at a time to avoid overspending.
Cash advance apps
Cash advance apps, like Earnin and Dave, let you borrow up to a few hundred dollars from your expected earnings; they usually require repayment on your next payday. Though cash advance apps don’t charge interest, they may require a subscription or fast-funding fee, or they may ask for an optional tip.
Some online lenders consider borrowers with poor credit — even those with FICO scores below 600. To help you qualify, they consider additional data, like employment status and outstanding debts. However, bad-credit loans have higher rates.
A lender that says it doesn’t have a minimum credit score may still review your credit report. Many of the lenders listed below use your credit history to make a loan decision.