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If your credit history is not in appropriate condition, then you might think of borrow money an out of question for you. This is what many people think that having a good credit score is a necessary prerequisite to showcase while applying for any personal loan, payday loan, car loan, or even mortgage.

But the good news is that there are possibilities of borrowing money online without requiring a rigorous credit check. So, here, you will get to know about what it actually takes to apply for a loan without a traditional credit check, pros & cons, difference between personal and payday loans, alternatives to no credit check loans, and more. So, without any further adieu, let’s get started.

What are Loans with No Credit Check?

Before actually going deep in the process of getting no credit check loans, better is to understand the relevance of such borrowings.

Lenders offering loans with no credit check will not consider your credit position because of the obvious reasons. But they do consider few other things to check your credit worthiness. It can be checking your proof of employment, bank account, current income, a valid contact number. Basically, these loans have short term tenure with only few weeks to repay the cash along with interest rate and financial charges. Payday loans, personal loans, and auto title loans are some of the few types of loans offered under no credit check position by lenders.

Pros Cons
No credit check required for borrowers having a thin line of credit worthiness to showcase. High interest rate is charged along with offering a loan for short term period only.
Fast loan approval with only showing limited proofs and getting cash within 24 hours. Fast approval can sometimes be treacherous as many high-risk lenders are available offering fake loans.

 Source: https://loanscanada.ca/loans/loans-in-canada-with-no-credit-check/

First Check your Credit Score

Now, that you get an idea as to what no credit check loans Canada look like, its time to consider few points like paying higher interest rate as compared to other borrowers. It is because of the fact that lenders will take a risk offering you loan without checking your credit history and knowing your credit worthiness. This is the reason, the loan is offered for bad credit holders.

But still, you can do your part by having a brief look at your own credit position by viewing the credit scores. You might check your credit and find that whether you actually have few points in place to apply for regular loans or not.

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You can refer to the below-mentioned FICO score.

Below 580 Poor
580-669 Fair
670-739 Good
739-799 Very Good
800+ Exceptional
   

Source: https://www.creditkarma.com/advice/i/what-is-a-bad-credit-score

How to Showcase your Credit Worthiness?

As we have already discussed, lenders will not pull of your credit report under no credit check loans. Then, how would they check your worthy behavior? Typically, you have to prove your financial position and ability to repay loan on time based on the following few things.

  1. Giving Bank Statement for Verification: In few instances, lenders might ask you to submit your bank statement to check the flow of cash going in and going out of your account. This is done to check your financial capacity to repay the loan on time. In case, you have too many financial responsibilities to take care of every month, then you might not get the loan approval. As for the bank statement, you can either send the screenshot of it, e-statements, or simply submit the hard copy to lenders.
  2. Giving Collateral as Security: In case you feel that you cannot even convince a lender with your monthly income as a proof of repaying loan on time. Then you can consider giving any asset as collateral. In a majority of cases, security is taken as a guarantee for you to repay the loan. In fact, secured loans do not even require checking the credit history of borrowers. With this, you can even borrower up to $5000 or more depending on the value of your collateral.
  3. Getting a Guarantor: Another alternative is finding a co-signer and let him/her apply for no credit check loans on your behalf. Make sure the fact that that person should have a healthy credit background and sufficient income to showcase.
  4. Giving Documents as Proof: Here is another option for borrowers is to submit income proof documents to showcase the ability of making on time repayment. Most lenders consider the monthly paycheque of borrowers to make sure the fact that loan can be offered or not.

Types of No Credit Check Loans in Canada?

Basically, there are three types of loans offered under the provision of no credit check.

  1. Payday Loans: As the name implies, this loan is offered against your next paycheque with a borrowed amount maximum up to $1500 for a period of 14 to 31 days. Strict regulations are being imposed on payday loans related to high interest rate, additional charges, and late payment fee in case of non-repayment.
  2. Secured Loans: More competitive and affordable secured loans offer an easy way out to borrow money online without a credit check. All you have to do is submit any asset as collateral.
  3. Unsecured Personal Loans: There are few lenders who offer no credit check loans without even requiring any collateral from borrower’s side. Under this, one could borrow up to $10,000 for anywhere 3 months to 5 years.
  4. Guarantor Loan: Next in the line is co-signer loan. You can let anyone having a strong credit position and monthly income to sign for a loan your behalf to get loan fast.

Difference Between Personal & Payday Loans

Payday loans and personal loans are two different products come under bad credit loans. These two have major similarities but is opted on the basis of interest and financial charges.

Loan Type Loan Amount Loan Term Cost
Personal Loan $500-$1000 & up to $35,000 3 Months to 5 Years 4.5% to 55%
Payday Loan Up to $1500 14-31 days $15 to $60 per $100 borrowing

Source: https://www.finder.com/ca/no-credit-check-personal-loans

Conclusion

Getting a loan while facing any financial crunch is not a big deal. What more important is how to apply for a loan with having negative credit scores in the profiles. Payday loans, personal loans, car loans, secured loans, and unsecured loans come under the category of no credit check loans in Canada giving an easy way out to borrowers arrange some necessary cash in no time at all. So, what are you waiting for, get your loan application forward it now.

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