You may need to take a vacation or fix a car that suddenly broke down, but you probably don’t have the cash to sort out such instances. The good news is that there are loans to cover such eventualities. If you’re considering a no credit check loan in Canada, here’s what you need to know.
What’s a No-credit Check Loan?
As the name suggests, this is a loan that doesn’t require a quick check into your credit history. You can consider it for real emergencies such as an urgent medical procedure or even getting your car fixed.
As easy as it may sound, getting a no-credit-check loan approved is not a guarantee. You must have other options on the side just in case it fails to go through.
All your lenders will need from you is proof of a stable source of income. This shows them that you’re able to repay the loan if they approve your application.
How to Get A No-credit Check Loan
Being on the payroll is a surefire requirement you’ll need to be considered for a no-credit-check loan. While this is true, the internet is a wealth of resources if you choose to take this path.
You can find as many lenders online and study what their terms and conditions are. They have various packages on offer to suit your salary and what you intend to use the loan for.
During your search for credible and flexible lenders, pay more attention to the ones that will look into factors other than your credit history. Factors such as your employment history and current income might make them reconsider.
Updated Bank Statements
Lenders need a clear picture of the activity that goes on in your bank account. It enables them to make a sound decision touching on your loan limit and how long you’ll take to repay the loan once it’s approved.
Credible Documents to Confirm your Income
Lenders want to ensure that you get paid regularly and are stable enough to afford a loan. This makes everything as smooth as possible on your end.
You could also term it as collateral since it stands in the gap for your credit history. Security grants you the ability to apply for a loan that befits your current venture; what’s more, putting up your valued assets as collateral heightens your chances of getting a no-credit-check loan.
Get a Trustworthy Guarantor
A guarantor plays the all-important role of representing you and standing out in areas that you may be limited in as a loan applicant. For instance, settle for a guarantor whose credit score is impressive, has a healthy financial history, and a better income.
These qualities will help once you default in loan repayment for some reason. Before listing them, it’s best to notify your potential guarantors.
Types of No-credit Check Loan Options
1. Credit Union Loans
An essential requirement to apply for this loan is a member of a credit union. Once you are registered as a member, you can open a savings account, which you must update regularly.
Keeping it active by regularly saving money increases your chances of having your credit union loans approved. When you belong to a larger credit union, you are assured of additional services and products.
Credit unions are based on the following:
- Providing loans at lower interest rates for members.
- Encouraging members to be diligent in their bid to save money regularly.
- To provide financial assistance to members in dire need of it.
2. Payday Alternative Loans (PALs)
Credit unions offer PALs to members who need cash urgently on a short-term basis. The borrowers will then repay the loan in monthly installments to agree upon with the lender.
PALs money lenders will look at your credit score solely to determine whether you need the loan. They’ll also check your income to determine your repayment capability.
3. Payday Loans
As the name suggests, these loans require you to pay back on your payday. As much as they are not complicated, they are expensive to pay back, especially when you have a lower credit score.
Lenders expect you to pay back your loan a couple of weeks before or on your payday. Failure to this attracts hefty fines and penalties that will create a bigger dent in your finances.
4. Bad Credit Loans Online
Most borrowers opt for this option since there are many reputable lenders online. It’s also easier for them to access bad credit loans at the simple touch of a button. What’s more, borrowers are at liberty to pay off the loan in monthly installments.
However, consider the annual percentage rates (APRs), among other factors, before settling for a certain lender. Check the reviews from previous clients as they could save you from unforeseen financial pitfalls.
In Canada, no-credit-check loans can be quite flexible, depending on your monthly income and payment plans. Your lender’s terms of conditions can also determine how flexible your loan will be.