Payday Loans

Alternatives To Payday Loan With No Credit Check

If you have a poor or bad credit score, a payday loan with no credit check may look like a very attractive option, especially if you urgently need some extra cash to meet your financial needs. You can qualify for it even with bad credit because lenders do not check your credit score; for them, your job is the security card. Depending upon the amount of your monthly salary and the kind of lender you are signing up with, you can easily borrow anywhere between $100 and $1000. Though some states have banned these types of lending practices, others have put certain limitations and restrictions. The problem with these short-term cash advances is that it charges extremely high rate of interest. Besides that, hefty finances charges are also applicable additionally. In general, a $300 of loan can cost you anywhere between $90 and $150, sometimes even more. It is because of these risks factors why even Federal Trade Commission has issued warnings about these loans. The FTC recommends consumers to be very careful while choosing a payday loan company. They further suggest consumers to consider better alternatives. Following is a brief rundown on some of the most common alternative options that might just work for you even if you have bad credit or do not want the lenders to check your credit at all.

Contact Banks That Specialize In Sub-Prime Customers

Banks and other local lenders that specialize in sub-prime customers can be a much better alternative to a payday loan with no credit check. They offer special lending programs for those consumers who are struggling with bad credit. Since it is risky for the lenders to issue loans to people with bad credit, they usually try to compensate this risk by charging a much higher rate of interest as compared to the loans issued to people with good credit. But, the good news is that the rates charged on these loans are still much lower than the rates charged on no credit checking payday cash advances.

Offer An Asset Or Property As Collateral

Another great way to qualify for a low-rate conventional loan even with bad credit or without requiring the lenders to check your credit is by offering an asset or property as collateral. A secured conventional loan can be a much safer and more convenient alternative to a payday loan with no credit check. You can use any asset that you own as leverage for approval of loan. It can be any asset of your choice, anything that can be liquidated to cover the amount of loan. For example, it can be your home, your car, or even an expensive artwork. Since the lenders do not have to bear any risk in secured loans, they often do not care about your credit score. However, this option is a little risky for you, especially if you do not make the repayment in a timely manner. In such cases, the lenders will sell off the asset put as collateral to get their money back. Therefore, you are advised to go for this option only if you are confident about your financial ability to make timely repayment.

The biggest advantage of choosing an alternative to a payday loan with no credit check is that when you make timely payments toward those loans, it can actually help you improve your credit score also. Payday loans even if repaid timely are usually not reported to the major credit bureaus.


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