Can you get a personal loan with no credit check?

If you have a low credit score or thin credit history, getting approved for a personal loan can be challenging. This is because lenders consider your credit history and score to determine how likely you are to pay the loan back and to make timely payments.

But if you have a bad credit score or no credit history, you may be able to get a personal loan without a credit check. While a no-credit-check loan may seem like your only option, be careful. No-credit-check loan costs are generally very high, and some loan types can be predatory.

Lenders that offer no-credit-check loans

Several lenders offer no-credit-check loans, including the ones below. Some loans may come with triple-digit APRs and lenders may not disclose all fees prior to application. As such, you should only consider these loans if you’ve exhausted other options.

OppLoans

Best for: Borrowers with no credit or bad credit

Loan amounts: $500 to $5,000; varies by state

APR: 59% to 160% APR; varies by state

Repayment terms: 9 to 18 months; varies by state

Fees: No prepayment penalties; doesn’t disclose other fees

Earnin

Best for: Those looking for a paycheck advance

Loan amounts: Maximum of $100 per day, up to $750 per pay period

APR: None

Repayment terms: Payment due on your next payday after borrowing

Fees: No mandatory fees; lender does accept optional “tips” up to $14, which are debited when you receive your next paycheck

Possible Finance

Best for: Borrowers looking to build credit, as lender reports payments to 2 credit bureaus

Loan amounts: Up to $500; varies by state

APR: 150% to 200%

Repayment terms: Repay the loan in 4 installments over 8 weeks; lender also offers a 30-day grace period

Fees: Borrowing fee varies by state and may be a flat rate or a percentage; no late or penalty fees

What is a no-credit-check loan?

As its name implies, no-credit-check loans are a type of personal loan where the lender doesn’t perform a credit check. Instead, lenders consider other factors like your income and debt to determine your eligibility and the rate you’ll receive.

Some of the most common no-credit-check personal loans are payday loans, payday alternative loans, title loans, and cash advance apps. These loans provide options to those with little or poor credit, and you can use the funds for nearly any purpose.

But because these loans tend to have higher interest rates and fees than traditional ones, they may not be your best option. If you have bad credit or high debt balances, consider improving your credit through a secured loan, credit counseling, or a debt management plan before applying for a loan. 

Personal loans for bad credit

See if you can prequalify for a personal loan before getting a no-credit-check loan. Some lenders offer loans for bad credit, which means you could pay much less to borrow money (or be able to borrow more) than you would with a no-credit-check loan. These loans tend to offer longer repayment terms and higher loan amounts. Plus, APRs are generally capped around 36%, which is much lower than most no-credit-check loans.

Note that prequalifying for a loan won't impact your credit, but it's not an offer for a loan. If you formally apply for a personal loan, the lender will conduct a hard credit inquiry which could temporarily ding your score by a few points.

How do no-credit-check loans work?

No-credit-check loans are usually short-term loans you may receive without the lender checking your credit history. To apply, you must submit some personal information, such as proof of income and bank account details.

If approved, the lender will offer you a loan, but since the lender is offering a loan without any credit information, any offer will likely come with exorbitant interest rates and fees. As detailed above, no-credit-check loans often come with interest rates above 150% APR. Even if you’re approved for a payday alternative loan with a credit union, you can expect to pay interest rates up to 28%.

Payday loans may be your worst borrowing option. According to the Consumer Financial Protection Bureau (CFPB), typical fees for payday loans range from $10 to $30 for every $100 you borrow, depending on your state laws. As the CFPB notes, a $15 fee for every $100 borrowed equates to an APR of nearly 400% for a two-week loan. These high interest rates and fees render no-credit-check loans a poor lending option for most borrowers.

Types of no-credit-check loans

These types of loans come in many different forms, including the following. While these options may seem attractive as they don’t require a credit check, they do involve high interest rates and expensive fees.

Payday alternative loans

Payday alternative loans, or PALs, are a type of short-term loan offered by federal credit unions as an alternative to expensive payday loans. Still, the interest rate is not borrower-friendly. The National Credit Union Administration (NCUA) caps the interest rate for PALs at 28%.  

PALs offer loan amounts up to $2,000 and repayment terms ranging from one month to one year. Loan limits and repayment terms are dependent on how long you’ve been a credit union member.

Cash advance apps

These apps can give you an advance payment you must repay with your next paycheck. Typical advance amounts fall between $25 and $750.

You may come across cash advance apps that don’t charge an interest rate or a fee to receive an advance payment. But if you need the cash right away, be sure to check a lender’s funding times, which may take several days. In that situation, some lenders charge an extra fee to deliver your money sooner. Alternatively, some lenders charge a monthly fee instead of interest, fees, or other costs.

Payday loans

Payday loans are a type of short-term loan you can obtain online or at a payday loan store. Since these loans don’t require a credit check, they are often sought after by borrowers with little or poor credit history.

The biggest drawback to payday loans is high fees equal to APRs of 400% or higher. Generally, loans are for $500 or less, and you must repay them in full on your next payday. High costs and short repayment terms make payday loans a poor lending option for most borrowers and should be considered a last resort.

Title loans

A title loan is a secured loan that uses your vehicle’s equity and title as collateral. Like other no-credit-check options, title loans have high interest rates and short repayment terms. With title loans, your lender places a lien on your vehicle, meaning the lender can repossess your vehicle if you fail to repay the loan.

How to get a no-credit-check loan

The process to obtain a no-credit-check loan can vary by lender, but it’s generally straightforward.  

1. Gather documents: Be prepared to submit documents to support your application, such as:

• Valid government-issued identification
• Proof of income, such as W-2
• Your employer’s contact information
• Bank account statements and routing information to fund your loan

2. Fill out the application: Many lenders let you apply online, which is the easiest and fastest method. Or, if you prefer personal service, you can apply in person at a local brick-and-mortar office.

3. Review loan terms and make a decision: After reviewing your application, the lender may extend a loan offer. Remember, lenders that offer personal loans without a credit check usually offset their risk by charging high interest rates and fees, so you’ll want to carefully review the costs and repayment terms before accepting a loan.

4. Sign the loan agreement: You’re legally entitled to review the interest rates and fees attached to your loan before you sign the loan agreement. If you agree, you’ll need to sign the closing documents, then you can expect to receive the funds typically within a week or as soon as one business day.

Pros and cons

Getting a no-credit-check personal loan be tempting, especially if bad or limited credit prevents you from being approved for credit cards and other loans. However, you may have better options than these types of loans. Before applying, carefully consider the pros and cons to help determine if this type of loan makes sense.

Pros

• No credit check: As its name suggests, the most significant advantage of no-credit-check loans is that lenders use factors other than your credit to determine your loan eligibility
• Fast funding: In many cases, it’s possible to get approved for a loan and receive the funds within one business day or even on the same day.

Cons

• Exorbitant costs: No-credit-check loans typically come with high interest rates or fees or include complex terms that make it challenging to repay your loan.
• Potential for debt trap: A no-credit-check loan may lead to a cycle of debt. The high interest rates and fees, coupled with the short repayment term, can prove too challenging for some borrowers to repay. As a result, you might end up getting another loan or extending the repayment term of your current loan, leading to additional charges.

Loan alternatives

If your credit is making it hard to get approved for a personal loan, no-credit loans aren’t your only option. Consider these alternatives to help you get access to the money you need:

• Borrow from family or friends: Asking a trusted friend or family member for money may be your best financial option. Experts advise drawing up an agreement that outlines expectations, including a payment schedule, to avoid putting undue stress on your relationship.
• Enlist a cosigner: Adding a cosigner who has a solid credit history to your loan application can improve your chances of approval and get you more favorable terms. Keep in mind, however, your cosigner must agree to assume the responsibility of repaying the loan if you’re unable to make payments.
• Consider a credit-builder loan: If you don’t need money right away, you could take out a loan to rebuild your credit. By making your payment on time each month, credit-builder loans help you build a positive payment history, the most significant factor of your credit score. With a credit-builder loan, the lender holds your money in a certificate of deposit (CD) or a savings account as collateral. Generally, you’ll receive the funds only after you repay the loan by making fixed monthly payments, plus interest, for your full loan term. While credit-builder loans won’t give you fast access to cash, they can help you improve your credit for potentially better borrowing options in the future.
• Apply for a secured personal loan: If you’re having a hard time qualifying for an unsecured loan, consider applying for a secured one. Since the lender faces less risk, you may qualify for the loan and receive a lower interest rate. Of course, the biggest drawback to secured personal loans is that you can lose your collateral if you fail to make the loan payments.