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Pros and Cons of a No Credit Check Personal Loan

Personal Loans
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A no credit check personal loan can be a very dangerous thing because most legitimate lenders do not offer loans without checking a borrower's credit. In fact, the credit score and credit history of a borrower is usually the most important factor for a lender to consider when deciding whether to approve a loan, and if so, what rates to set. Before getting a no credit check personal loan, consider these pros and cons.

Pros of a No Credit Check Personal Loan

  • Getting a loan in an emergency situation. The old phrase says "beggars can't be choosers," and that is sometimes the situation that borrowers find themselves in. If a financial emergency has arisen and there is a serious, immediate need for money, then getting any kind of loan becomes very crucial. However, it is important that a borrower be very vigilant when dealing with any lender who offers a no credit check loan by looking at all the fine print in the line, including what happens if there is a late payment or loan default.
  • Quickly getting a loan. If you can get a lender to remove the credit check from the loan process, that will greatly speed up the time it takes between loan application and having the money deposited in your account. If some cases, loans granted without using credit checks can be completed in as little as an hour.

Cons of a No Credit Check Personal Loan

The main disadvantage to pursuing a no credit check personal loan is that many lenders who offer such loans are not legitimate. They are pursing scams and trying to entice lenders by advertising loans that are "guaranteed" or do not require credit checks. The Federal Trade Commission warns consumers to be on high alert because such assurances often indicate you are dealing with an unscrupulous lender. Other cons related to a no credit check personal loan include:

  • Losing money or your identity. That is the real objective of many lenders who advertise guaranteed loans without credit checks, according to the FTC. Borrowers should be very careful about offering personal information to such lenders. If a lender who says they don't need to ask a credit report still wants a borrower's social security number or bank account information, that should ring all kinds of warning bells, according to the FTC. The lender may use your personal information to steal your identity and make purchases in your name or take money out of your bank account, claiming it is merely fees related to the loan. Borrowers should closely examine all language of a loan offered without a credit check.
  • Wasting time when you need a legitimate loan. By taking time to pursue a highly unlikely loan, since few legitimate lenders offer loans without credit checks, you have ignored your need for immediate cash. That means you may have little time left to address whatever emergency existed that caused you to search for a no credit check personal loan.

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