The Consequences of Choosing No Credit Check Loans
If you have bad credit and need a loan, you will probably have to choose between bad credit and no credit check loans. However, if you need a small loan just to pay for an emergency or for your monthly bills, then there is no better solution than no credit check loans.
But, while no credit check loans do come with a series of advantages, it is a type of loan that will bring a lot of debt if you are not careful. Why are some Aussies attracted to this kind of loan? What are the consequences of choosing no credit check loans? We will answer these questions and more.
Why Choose No Credit Check Loans?
There are many types of loans out there for people who have bad credit. But, those loans require a lot of documents and even a credit check, even if you do apply for a bad credit check loan. This is why many people choose to apply for no credit check loans. The first thing that attracts them to such a loan is the fact that it is easy to access. They do not need to present plenty of documents to see whether they are eligible or not. Not only that, but you can apply for this type of loan online, and it takes anywhere from forty-eight to seventy-two hours to get your money.
Because it doesn’t require your lender to check your credit score, you will no longer have an inquiry affecting your credit rating. So, all in all, the fewer lending requirements make no credit check loans accessible and a good option for those with bad credit. However, there is a catch to this type of loan.
Things to Take into Consideration
No credit check loans are accessible; they are easy to handle and may seem safe, but if you haven’t verified with a financial expert before applying for these types of loans, you are going to have a big surprise, the awful kind. The first thing you should know about no credit check loans is that they come with high interest rates. And you might be wondering: why do these short-term loans have interest rates? The answer is simple, but you will not like it one bit. In fact, there are many reasons.
It is because the loan is unsecured.
As you may know, unsecured loans usually have high interest rates so that the lender gets a part of his/her money back if something happens. The last reason as to why they have high interest rates is that these loans are for people with bad credit score. Because they represent a high-risk for the lender, he/she has to compensate some way to get a part of his/her money back in case the user defaults on it. Another thing you should know and be careful about is the penalty fee. If the lender fails to get his/her monthly repayment from your bank account, you will have to pay a penalty tax. The penalty fees are quite high and when they’re coupled with the high interest rates and other charges, you can get back to square one, financially speaking.
However, what can happen if you decide to default on no credit check loans? The first thing that is going to happen is that you will be bothered every day by debt collectors. You will receive phone calls, and they will even knock on your door. This experience is going to be dreadful.
The next thing that is going to happen is that every fund you have on your bank account(s) will be taken by the lender. It depends on the loan you took plus the charges. If that doesn’t work, the properties you bought will be taken away and auctioned. So, when it comes to no credit check loans, the drawbacks are major and shouldn’t be taken lightly. We recommend that you double check the paper that you are signing and make a plan on how you are going to pay the loan back without having to suffer any penalty fees or get harassed by debt collectors.
What We Recommend
The first thing you should do is look for other options. You might have bad credit score, but you could be eligible for a bad credit loan, which doesn’t attract a lot of drawbacks like the no credit check loan. Another thing that you can do is look for the best no credit check loan that you can find. It is in your best interest to compare loans between them from different lenders.
When it comes to no credit check loans, we recommend getting expert advice from financial counsellors. They have been in this line of business for years, and they can sort any financial problem you have.