Things to be Careful of Same-day Loans With no Credit Check

Just from reading the title of this article, lots and lots of people would be intrigued about such thing as same-day loans without credit check, because let’s be honest, the average credit score of people living in the US is not that stellar, and if you’re one of them, then a lender that provides loan without actually caring about your credit will be one of the things you’re looking out for.

That being said, it’s not all sunshine and rainbows with something as finicky as loans with no credit check. While it’s not quite an uncharted water per se, there are still lots of sharks and predators out there that’s looking to bleed their borrowers dry through their same-day loans with no credit check scheme.

Why You Need to Be Careful

Same-day loans to begin with is already a type of unsecured loan, which mean that there’s no need for collateral for you to provide them with, so if borrowers fail to repay the debt that’s owed to the lenders, then they may be subjected to a potential lawsuit. In other words, it’s riskier. This already signals a reg flag in most adults’ mind when they see it.

And, those risks get even worse when you add no credit check as another parameter. Let’s break them down one by one, shall we?

  1. Higher interest

Most of the time, a same-day no credit check loans can and will impose an absurdly high APR rates, starting anywhere from 6% up to triple digits number such as 199%, making them a much more expensive endeavor in terms of interest.

  1. Shorter terms

While it doesn’t seem that bad at a glance, a shorter term means you have less time to pay your loan, and with a higher cost than average, this

becomes a very prevalent issue that if not dealt carefully can lead to potential debt that is hard to get out of.

  1. Fees

It’s often common for a same-day no credit check loans to ask you to pay for one-time origination fee for the loan and then making a late-payment penalty that which combined with the higher interest of these types of loans, can become very problematic to deal with.

  1. Unexpected withdrawals

Typically, borrowers would have to agree to have loan payments automatically withdrawn from their bank account. So, if they ever run out of money or have a payment that needs to be paid to something like mortgage, landlords or other billers, it may create a dire personal situation for them if they fail to pay in due time. Not only that, but bank overdraft fees and credit dings can further worsen their financial situation.

What are the alternatives?

Seeing all those risks mentioned above, same-day loans with no credit check is not something that anyone should use unless it’s their last, last option to get quick cash for their endeavors. That being said, what are the alternatives then, well thankfully there are a couple that borrowers can and should check first before deciding to use same-day loans with no credit check.

Some that comes to mind first are something like credit counselors, religious organizations, or even community nonprofits, but, if these aren’t available to you either, then here are some more options:

  1. Payday Alternative Loans

We’ve all known about the predatoriness of payday loans in general where they’re looking to trap you into a debt that is really hard to pay off. Well, payday alternative loans or PALs are a credit union-issued loans that will help small dollar borrowers avoid the debt traps that these traditional payday loans are creating.

  1. Online Lenders

In this day and age where most things are digital, an online loan may not be as worse as it used to be considering the improvement they’ve made. As such, lenders such as OneMain and Avant that operates primarily on an online basis will consider borrowers with poor or even less than average score of below 600.

That being said, choose wisely based on what you need for loan. OneMain, while it has higher rates than the average do provide faster access to cash should you need them immediately, while Avant is a good option for debt consolidation.

Other than the two we’ve already mentioned, there are other online lenders such as LendingPoint and Upstart that doesn’t decide everything based on your credit score and instead gauge your worthiness based on other factors such as employment or income. Just beware of the high fees that comes with them.

  1. Credit Unions

And last but not least, credit unions. Even if you have a poor credit score and et cetera, considering giving your local credit union a shot. Most credit unions offer small dollar loans and are often willing to work with borrowers to make an affordable payment for them. Many also have starter credit cards or loans to help borrower build a good credit history.

Recommended Lenders

If our recommendation of alternatives above do not satisfy you, and you think that no-credit-check loans are truly the way to go for your situation, then there are two lenders that we could recommend to you first of them being OppLoans and the second being Capital Good Fund.

Again, only consider this option after you’ve ruled out every other alternative above because these sorts of lenders are a very expensive form of credit, and that’s not to mention that Capital Good Fund, the one that offers lower rates than OppLoans, is only available in certain states.

Conclusion

While it is true that same-day loans with no credit check can save your financial situation in a pinch, it’s also a very risky move to take considering the forementioned warnings above. Only consider it as an option when you know it’s the last thing that could help you after looking at the other option, because if one is not careful, the potential of borrowers going into debt or default is very high and of course, scary.

That is all from us from this article about same-day loans with no credit check. Loans and adulting in general is a tricky water to navigate, so we hope that this article help educate you about what it is and how to better navigate this long and winding road. Thank you from reading this article, and we hope to see you again on another one.

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