Every short-term loan has its own level of risk, and installment loans are no different. However, they can be a reasonable alternative to traditional loans and other personal loans like signature loans.
Conventional loans are offered as per a borrower’s income levels. They also have a fixed repayment schedule. There are a time limit and a borrowing limit in a conventional loan. Hence, even if a borrower wanted more money, he/she cannot possibly go beyond a certain level (constrained by income).
It is also important to refrain from financing a lifestyle by constantly borrowing and then making repayments on those borrowings. If this is indeed the case, then installment loans present a useful alternative.
Banks and traditional financial institutions aren’t too keen on lending to customers with bad credit scores. People with a less than desirable credit score can find installment loans no credit check (soft check performed) as a useful option. Keep in mind that installment loan lenders also evaluate your financial standing.
Banks want to establish your ability to repay the cash loan. For that, they will analyze your household monthly revenue and other details. The difference between them and a traditional lender is the flexibility with which installment loan lenders go about this process. They are not as strict as conventional lenders might be.
Access to credit without a bank account is extremely difficult. This happens to be the case because credit loan lenders also look for some kind of assurance that you will pay them back.
Just because credit loans do not come with extensive checks and conventional processes, that does not mean the lender will not evaluate your file thoroughly. The evaluation may happen in several ways.
For you to understand this concept, you should know that lenders usually perform a credit check of potential borrowers.
When it comes to installment loans a no credit check actually means that a soft check done. This is a background check to see if you are not a very big risk.
A risk for a lender is someone who has previously defaulted on an installment loan. Someone who has been in work for less than 3 months or someone who has not been at their address for more than 3 months.
Aggregators manage most of the online instant payday loan lender websites instead of actual lenders. They are the kings of the internet who funnel in leads to the direct lenders. The plus side of these websites is they check lots of lenders at once to get you a loan. The downside is the installment loan could be more expensive.
Note that we are not suggesting that installment loans no credit check (i.e. hard check) must be accessed from direct lenders only; we are just saying that it is good to consider it as an option. In addition, keep in mind that this is a contract between the lender and you.
The direct lenders do soft credit checks that are minimal, and this is in order to establish:
When the lender verifies that the borrower passes the checks, and the applicant has a steady source of income, then the loan is approved to the borrower.
Guaranteed installment loans direct lenders only are typically unlike regular loans since the lender grants them without many requirements and they are online.
When the loan is approved for the borrower, he might be able to have the money deposit in the bank account even on the same day. This quickness of processing transactions is due to the short loan application form that does not need much paperwork, resulting in faster processing times.
The acceptance rate for loans is relatively much higher. Another added benefit is the absence of any extra processing fees. The whole process is less time consuming as no extra information is requested from you.
If data privacy and consumer confidentiality are what worries you, then fear not. The entire application for a payday loan is filled and processed online. The decision on your application also comes in quickly. The authorities have also placed strict laws to protect your sensitive personal information.
Installment loans with no credit checks may be a viable option if you are struggling with your credit score, compared to traditional loans. However, they are not the sole solution out there, and it is good if you explore other financial solutions.
Note to readers: We would like to clarify that we are not affiliated with any lender or broker. We do not make decisions about lending, neither do we influence the decisions that lenders take. We do not have any role in evaluating an applicant credit and we do not lend out money either. All decisions taken by lenders are independent and we are not responsible for their actions.