Misfortunes in life often come suddenly, be it an illness or losing your job. In situations like these, all you need at the end of the day is money to tackle the unprecedented situation and pay all the mounting bills. Financial institutions today offer a variety of loans to help you overcome the adversities of life. While you might believe that it’s impossible to get a loan without a credit check, you are mistaken. There are a myriad of ways to get a no credit loan in Canada.
Everything You Need To Know About No Credit Check Loans Canada
Are you facing a financial crisis? Do you want to get a no credit check loan? Read on to learn everything about getting a no credit check loan in Canada.
What is a no credit check loan?
Credit checks have become a prerequisite when getting a loan from a financial institution today. A credit check is the analysis of the borrower’s credit history and score to assess the risk of lending money. The credit score is the numeric assessment of the creditworthiness of the borrower. It serves as an essential metric for lenders to analyze their risk and then decide whether to approve the loan or not.
A person can have a bad credit history due to failure to make payments, bankruptcy, or loan refusal, like the 1 million other people in Canada with bad credit. If you are one of them, you can still get a no credit check loan. These loans can be used to get fast cash for any emergency, from a medical procedure to sudden car repair. Lenders don’t carry out a hard credit inquiry of the credit report, but a borrower can qualify for a loan even if they do. If you are looking for secure and easy options, you can get no credit check loans on PersonalMoneyNetwork’s website.
Pros of no credit check loan:
- Bad credit history is accepted: The most prominent advantage of a no credit check loan is that it doesn’t require a thorough credit check. Even if you have an unsatisfactory credit score or no history at all, you can still get a loan.
- Quick approval of loans: The lenders who offer no credit check loans are designed to provide money quickly. While some deposit money the same day, a majority takes only 1-2 days.
Cons of no credit check loan:
- High-risk lenders: Since the lenders are mostly private, there is a risk of taking loans from them.
- The increased cost of borrowing: Without a credit check, you are a risky borrower, and the lenders may charge a higher rate of interest from you than traditional financial institutions.
Types of No Credit Check Loans
In Canada, you can get all kinds of loans from all types of lenders. The prime lenders like banks have strict rules regarding lending, so the lenders that do not check credit score or history are often privately owned. It enables them to have a set of approval policies.
Here are some of the common types of no credit loans:
1. Payday Loans
A payday loan consists of a small amount ranging from $100 to $1,500 and has a short repayment period of two weeks. Much like other loans, you can get the amount deposited directly from the lender in your bank account. They are speedy and easy to get, with a waiting period of only 1-2 days. You must be a resident of Canada and have a steady income to become eligible for this loan.
2. Personal Loans
Personal loans are the most common loan offered by every lender. The amount of a personal loan can vary from lender to lender, along with the number of installments and repayment terms.
In Canada, there are two types of personal loans. They are:
- Secured personal loans: For this loan, you will have to provide collateral, which will enable a borrower to get more credit at lower rates and more manageable repayment terms.
- Unsecured personal loans: It doesn’t require collateral but comes at higher interest rates. Without security, a borrower is considered high risk, and hence the repayment terms will be shorter.
3. Guarantor Loans
Another way to get a loan without a credit check is through a guarantor, also known as a cosigner. The borrower can bring another person with better credit history to help them get a loan. A guarantor gives a ‘guarantee’ that even if the borrower fails to repay the loan, they will make the payments in time. It helps the actual borrower get a better loan and have a backup in case of financial troubles.
4. Car Title Loans
In case the borrower owns a vehicle and has some value, it can be used as collateral to get a loan. Much like using any other asset as collateral, the lender will waive a credit check when they provide loan security through the vehicle.
Requirements for a Loan Without a Credit Check?
Every borrower needs to meet the requirements to get a no credit check loan. The eligibility terms tend to vary from lender to lender, but here are a few things they may check:
1. Income Level
While the lender may not conduct a thorough background check for credit history, they may analyze if the borrower is steadily employed and earning well. The borrower must have a monthly income of $1,000 to $2,000.
2. Bank Statements
To prove the lender’s financial status, the loan applicants must submit the recent bank statements for the last 1-3 months.
3. Recent Bills
To verify the address and other personal details, they may also ask for utility bills for the last few months.
4. Details of Asset or Cosigner
The lender can inspect the details of the asset you are pledging as collateral or the creditworthiness of the cosigner to ensure the risk they will be undertaking while approving your loan.
The borrower may have to submit their government-issued ID, driver’s license, or passport as proof of age and permanent address.
While most people try to save up money for contingencies, not everyone can have sufficient funds when the financial crisis occurs. If you are facing an unprecedented situation, you can get a loan even without a credit check. Look for credible lenders who don’t require your credit score and get a loan today.
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