If you need extra cash and have considered applying for a loan even with a bad credit score, you might have already heard about the no credit check loan.
Image by Bermix Studio
Many people opt for a no credit check loan as their last resort. Like any other loan options, a no credit check loan has its pros and cons. Knowing if this is the best option for you allows you to go consider both its advantages and disadvantages.
But is it your best option? Is there another way to acquire cash without looking into your credit record?
Here are the other advantages of a no-credit loan:
No Credit Checks
You are considering this loan option because the lender will not bother to check your credit report. It doesn’t matter whether you have a good or a bad credit score as long as you are eligible and can comply with their requirements.
This benefit is one reason why this loan option attracts many borrowers, especially those who don’t have an impressive credit score and those who are still building their credit records.
Other loan options will require you to provide a good reason why you are acquiring the loan.
For example, lenders will ask you how you will use the loaned money aside from knowing your capability to repay the money you owe. But with the no credit check loan, lenders will ask you this kind of question during your application.
Just like any other options available out there for you, a no credit check loan also has its disadvantages. These things may be huge factors for some consumers, while to others, they’re just minor inconveniences you need to deal with.
Higher Interest Rates
One of the most common and obvious disadvantages of a no credit check loan is its higher interest rate. Since the lenders will not bother looking at your credit history and rating, they will impose a higher interest rate on your loan.
The higher interest rates imposed are due to risks they take in lending you their money without even knowing if you can pay it back. This is a common rule for all lenders who offer a no credit check loan.
Required a Minimum Loan Amount
If you only need a small amount, a no credit check loan may not be the best option for you. Lenders require a minimum loan amount when you apply for a no credit check loan. Most personal loans with no credit check will require you to loan a higher amount than other loan options such as payday loans and single-payment loans.
May Require A Collateral
Lenders may require you to have collateral as an assurance for the money you are borrowing from them. It is also to secure their part if ever you cannot pay back the cash you borrowed from them. If you default on your loan, the lender will forfeit the collateral. Collateral can be in the form of any valuable assets such as a house, vehicles, and jewelry.
Another positive thing when acquiring a personal loan with no credit check is the speedy process. You can get the money in just a few minutes or hours as long as you comply with all of their requirements and are eligible for the loan.
Reminders Before Applying for This Loan
There are things that you should watch out for when opting for this loan type, especially if you do it online, such as:
Watch Out For Fake Lenders
This is the risk associated with a no credit check loan. Some criminals use this to lure their victims for phishing and identity theft. Make sure that you choose a legitimate lender and never give out personal information prematurely. It is best to ask someone you trust for a recommendation or for help with securing a loan from a trusted lender.
Prepare The Requirements Ahead Of Time
It is best to prepare all the requirements before applying for the loan to help you acquire the money quickly. Check your chosen lender’s website or print ads for a list of requirements they will need.
Even though this loan option does not require a credit check, it does not mean you are guaranteed approval. If the lender finds out that you are not eligible for a loan, your application will be denied.
Asking yourself if a specific loan option is good for you is one of the proper ways to assess if you should apply for it or not. This practice should be observed in applying for no credit check loans and other loan types available. Remember, not all loans are suitable for you. One loan may work better for others but may not work the same for you. Hence, be prudent and choose the loan option that suits best with your financial needs.
Since you’re here…
We believe everyone in Indian Country deserves equal access to news and commentary pertaining to them, their relatives and their communities. That’s why the story you’ve just finished was free — and we want to keep it that way, for all readers. But we hope it inspires you to make a gift of $5 or more to Native News Online so that we can continue publishing more stories that make a difference to Native people, whether they live on or off the reservation. Your donation will help us keep producing quality journalism and elevating Indigenous voices. Any contribution of any amount — big or small — gives us a better, stronger future and allows us to remain a force for change. Donate to Native News Online today and support independent Indigenous journalism. Thank you.
Getting into debt is easy — and the numbers prove it. About 80% of Americans across generations are currently in debt, a 2019 Nitro survey found. And the total amount of household debt in America is nearly $13.95 trillion, according to the Federal Reserve Bank of New York’s most recent report on household debt and credit.
One of the biggest reasons people get stuck in debt is because they believe that debt is just a part of life, said Debbi King, owner of the personal finance coaching firm The ABC’s of Personal Finance. In fact, a 2015 Pew study found that 7 out of 10 people said debt is a necessity in their lives. “However, debt is a result of wanting or needing something that you don’t have the cash to buy at the moment,” King said.
If you are determined to get rid of debt, you can rid yourself of these wants. “You have to not want debt so bad that you refuse to use it no matter what,” King said.
You also need to give yourself a wake-up call by keeping close tabs on your spending to see how much you’re relying on debt to maintain your lifestyle. “You may be using your credit card more than you realize,” said Bruce McClary, vice president of marketing for the National Foundation for Credit Counseling (NFCC).
Once you figure out how much you owe, make a plan to pay off the debt. Having a goal of getting out of debt might give you the motivation you need to stop relying on it.
Many people assume they will never fall deeply into debt, said Matt Cosgriff, a certified financial planner and wealth management group leader at BerganKDV. “But it can happen so easily if you aren’t financially prepared,” he added.
For example, if you don’t have cash reserves to cover unexpected expenses, you might have to rely on credit cards. You will end up paying more than the original cost of the emergency if you do not pay off the balance quickly because of the interest on your card charges. Plus, you might not be able to build savings to cover future emergencies if your money is going toward paying off debt.
You can avoid this situation by creating an emergency fund, Cosgriff said. Ideally, you should save enough to cover up to six months of expenses. If necessary, start by setting aside a little each month, then increase the amount when you can. And make sure you have adequate insurance to cover catastrophic events, such as a medical emergency or car accident.
It’s hard to eliminate debt if you’re only paying the minimum you owe. In fact, McClary said it can become unmanageable if your balance continues to grow while you’re paying the minimum amount required.
For example, if you have a $5,000 balance on a card with a 17% rate and make a minimum monthly payment of 3% of your balance, it will take you 189 months — or nearly 14 years — to pay off your debt. Meanwhile, you will pay more than $4,000 in interest, according to Navy Federal Credit Union’s minimum payment calculator.
Simply increasing the amount you pay can make a big difference. For example, you can cut the payoff time and interest in half by boosting your monthly payment to 5% of your balance.
Andy Brantner, a certified financial planner and partner at BKLM Financial Services Consulting, knows financial discipline does not come easy. “It’s hard not to buy a better car or a bigger house when you get a raise,” he said. “But failing to keep your expenses steady when your income goes up creates a vicious cycle.”
It can be especially dangerous if you are still carrying debt from the days when you were earning less, and now are taking on more loans to help pay for that bigger house or a better car. Your debt will balloon, leaving you unable to pay if off despite the bigger paycheck.
To avoid this, identify goals and review your spending to see if it’s in line with your priorities. If it’s not, you will need to create a spending plan that will align your expenditures with your values.
If you get a payday loan to cover an emergency, it doesn’t mean you will be stuck in debt forever. After all, most of these short-term loans typically have to be paid back within 14 days.
But most people who get payday loans use them to cover everyday expenses, according to a report by Pew. And they often take advantage of rollover features that allow them to extend the amount of time they have to pay off the loans. Because the interest rates on these loans are so high — the average annual percentage rate is 391%, according to the Center for Responsible Lending — the debt can mount quickly.
If you roll over a typical payday loan of $325 eight times, you’ll owe $468 in interest and have to repay a total of $793, according to the center. Do that often enough and you will be stuck in debt forever.
Make a plan to quickly pay off any payday loans you might have, even if it means getting a second job. Then take steps to improve your credit so you can qualify for lower-rate conventional loans going forward.
You Don’t Track Your Finances
“If you aren’t paying attention to where your money is going, it’s easy to overspend in certain areas and then not have enough for those unexpected expenses or your regular bills, which puts you in debt and keeps you there,” said Andrea Woroch, consumer and money-saving expert.
“Stay on top of your finances by checking your accounts daily,” Woroch said.
It’s easy to do this from your phone by using your bank and credit card apps, or you can use a tracking app like Mint, which links all your financial accounts in one place.
“When you see how much you’re spending in one area, it’s easier to cut back,” Woroch said. “Remember, you can’t change what you can’t see, so it’s important to actually look at your money regularly to make sure your spending aligns with your budget and goals.”
You Disregard Your Credit Score
“If you don’t have a healthy credit score, your interest rate on your credit cards and/or loans is likely really high,” Woroch said.
The higher the interest rate you have to pay on your debt, the harder it will be to pay it all off.
“Get on track by committing to improve your credit score, which you can do in a few ways,” Woroch said.
These ways include always paying all your bills on time, keeping your credit utilization rate below 30% and using a credit-building loan to boost your score.
“For example, Self is an app that helps you build credit while you save,” Woroch said. “It’s a credit-builder loan, which is an affordable and accessible loan you take out in your name — but you don’t receive the money upfront. Instead, you make payments to yourself over the course of one to two years, and Self reports the payments to all three credit bureaus. In the end, the money you’ve put aside every month unlocks in the form of savings minus fees. It’s a unique product that is an accessible option.”
You’re Not Maximizing Your Earning Potential
“There are only so many ways you can cut back on your day-to-day and monthly spending,” Woroch said. “Sometimes you have to make more money to really get ahead financially and get out of debt.”
That means that if your only source of income is your day job, you probably aren’t doing enough to get yourself out of debt.
“People often limit their ability to make more money because they don’t think outside the box,” Woroch said.
“If you can’t ask for raise or find a better paying job, then take on a side hustle,” Woroch said. “For instance, you can make up to $1,000 a month by simply petsitting in your own home via sites like Rover.com, which makes it super easy to set up a schedule that works best for you. This doesn’t require any special skills or really any time commitment because you can do this from home when you’re already home. Plus, you can double your side income by doing another side hustle at the same time as petsitting, like freelancing via Upwork.”
Student loan debt has reached $1.5 trillion, and payments on more than 9% of this student loan debt are at least 90 days late, according to the Federal Reserve Bank of New York. “So many people right now are burdened with student loan debt,” McClary said.
If your student loan debt is unmanageable, McClary recommends talking to a certified student loan counselor to identify your options, such as income-based repayment or loan consolidation. You can visit studentloanhelp.org to find an NFCC member who will offer student loan counseling at little or no cost.
To avoid racking up student loan debt, McClary recommended that parents and students look for sources of free money for college, such as grants and scholarships. And families should weigh the costs of the schools their child wants to attend against the child’s earning potential after graduation. That will help the family determine whether the child will be able to pay off student loans.
You Allow FOMO To Dictate Your Spending
“One of the biggest things that causes people to overspend and brings them into debt is FOMO — the fear of missing out is a real thing,” said Ande Frazier, CEO of online financial community MyWorth. “It’s easy to get anxious when other people are having fun without you, especially when it’s happening in real-time on social media. This feeling might have you saying ‘yes’ to more dinners, drinks, activities and vacations than you want or can reasonably afford to attend.”
Frazier recommends using cash instead of credit so that you really think about your spending decisions, rather than mindlessly swiping to keep up with the Joneses.
“The tangible nature of cash gives more value to the decision to spend that money, rather than just swiping a credit card, because you can see it and feel it,” she said. “It’s a form of mental accounting.”
You Have Your Financial Priorities Mixed Up
If you’re not allocating your money wisely, it will take you longer to pay off debt than it should.
“The most common mistake when it comes to short-term debt (i.e., credit card debt) is the belief that one needs to save and invest simultaneously,” said Roi Tavor, CEO and co-founder at Nummo, a personal finance management platform.
Any money you are putting toward saving and investing accounts is money you aren’t putting toward paying down debt.
“Before putting money in a savings account that yields 1% or 2%, make sure to pay off credit cards that charge you 10% or more on outstanding amounts,” Tavor said.
You Set Unrealistic Goals for Yourself
If you’ve been in debt for a while, maybe you’re constantly telling yourself that this will be the month you pay off all your debt. But if you have thousands of dollars of debt, this goal likely isn’t realistic.
“Having a plan to pay down debt is a great starting point; however, if you make your goals too lofty, you’ll set yourself up for failure,” said Leslie Tayne, founder and head attorney at debt solutions law firm Tayne Law Group. “In doing so, you’ll likely get discouraged and may even give up, preventing you from reaching your goal of paying off your debt.”
“While you, of course, want to pay down your debt as quickly as possible, keeping your goals reasonable will help keep you motivated and on track to get that debt paid off,” Tayne said.
Start by making it your goal to pay off one credit card or loan at a time. Ideally, start with the card or loan with the highest interest rate, and move down the line in order from highest to lowest interest until they’re all paid off.
You Justify Credit Card Spending Because of the Points You Earn
Many credit cards offer rewards systems that can be beneficial if used correctly.
“Many people charge almost all of their everyday purchases to their credit cards to take advantage of these rewards,” Tayne said. “However, if you’re carrying debt, the interest you’re paying will be negating the value of your points. Keeping the mindset that you’re always working towards the point may also be keeping you in debt if you’re not paying off your balances in full every month.”
“Consider switching your everyday purchases to cash or debit, or ensure that you’re paying off each of your credit card purchases in full while you’re working to pay down your debt,” Tayne said.
You Don’t Differentiate Between ‘Wants’ and ‘Needs’
Sometimes there can be a fine line between “wants” and “needs.” Let’s say your TV breaks and you need a new one. You head to the store and see a brand new 65-inch TV and decide that’s the one that you “need.”
“Sure it’d be nice to have in your living room, but do you need a $2,000 item for entertainment? Especially if you are going into debt for it and it’s going to cost $3,000 with interest by the time it’s paid off?” said Brandon Neth, credit card and award travel expert at FinanceBuzz.
“When you’re at Best Buy, you may be able to tell the difference between a 55- and a 65-inch screen mounted right next to one another, but once you’re home, you realize you’ll likely be fine with a smaller TV,” he continued.
Set a budget for yourself before you walk into a store, and consider buying items that aren’t name-brand.
“As a former Magnolia/Best Buy employee here’s a friendly piece of advice: Many of the non-brand-name TVs use the same panels and technology as the big brand TVs,” Neth said. “Often they’re just calibrated differently out of the box. They can be adjusted to create almost the exact same picture in many cases. Save the money, invest it and build wealth — not debt.”
You Go Overboard During the Holidays
Nearly half of those surveyed in 2019 by Discover said they plan to rely on credit to pay for most of their holiday spending. That can lead to starting off the new year in debt. If you don’t pay it off quickly and turn to credit again every holiday season, your debt will mount.
“It’s really important at this time of year for people who might have a weakness to find support,” McClary said. Find a credit counselor through NFCC.org or look for a workshop to get support for building a habit of saving rather than spending, he said.
McClary also recommended avoiding spending time around others who have a tendency to overspend and “getting in situations where you’ll be melting the plastic at the register. Lock up the credit cards this time of year.”
Your Focus Is On the Short Term Rather Than the Long Term
“People don’t think long-term,” Neth said. “They are too focused on the now and looking for instant gratification.”
He gives the example of regularly charging coffee to your credit card — even if it only costs $5.
“If you’re doing that twice a week, that $10 adds up quickly,” Neth said. “Even worse, if you’re putting this on a credit card that you’re not paying off in full each month, paying interest on your two cups of coffee may raise the cost to over $20. Although it’s convenient and tastes good, remember how much further your money can go.”
A change in your spending mindset can help you break this debt-causing behavior.
“The one thing we don’t get more of in life is time, so look at your expenses as time,” Neth said. “How much are you actually making an hour once you deduct taxes, expenses and other related costs? A $15-an-hour job is probably closer to $9. Stop and think, is two cups of coffee worth an hour of my time?”
This is an especially important mental exercise for larger purchases.
“How many extra years must you work to pay off that car or TV? These numbers just get higher as you account for accruing interest,” Neth continued. “Don’t stall your financial future by making impulse decisions today. Set goals for the future and remind yourself of them daily. It takes hard work to get out of debt and stay out of it, but when you do, you take back control of your life.”
Rent-to-own store RTBShopper has partnered with financial service provider Acima Credit so their customers can have access to additional leasing finance option while purchasing goods
Winter Garden, FL – RTBShopper is proud to announce its partnership with Acima Credit, a reputable company that offers financial and leasing solutions for shoppers. Acima employs proprietary technology to help consumers find the merchandise they’re looking for, acquire the item, and get immediate approval. Customers get a tailored payment schedule that is flexible, convenient, and affordable.
The partnership means that RTBShopper.com is now an online store that accepts Acima Credit. It’s a massive development that gives customers additional access to simple lease-to-own financial solutions.
“We’re excited about our partnership with Acima because we know they’ll provide our customers with the best options when purchasing electronics, furniture, and appliances through rent to own payment plans,” said Tony C, Chief Operating Officer at RTBShopper.com.” “Acima Credit specializes in affordable financial solutions for lower-income consumers, and this agreement will help us to provide flexible payment plans from a company everyone knows and can trust.”
RTBShopper is an online store offering rent to own opportunities for shoppers, even those with bad credit. The company’s philosophy is that no one should be judge by their credit history. That’s why they don’t require credit score when shopping. To shop on site, the customer must be 18 years or older. They will also have to provide social security number or individual taxpayer identification number, debit or credit card, checking account, and government-issued photo ID.
Customers can shop thousands of products in different categories, including computers, TV, cameras, furniture, home appliances, toys, cell phones, smartwatches, electronics, etc. Add the merchandise to the shopping cart, checkout, fill out the no-obligation lease form, pay the initial deposit, and get the item. Customers get an email when the item is ready for pick up or shipping.
RTBShopper.com help consumers get approved for up to $5000 worth of brand name electronics. They serve low-income consumers who can’t afford to pay one-time for these items, allowing for monthly or weekly payment plans.
As a store that accepts Acima, they hope to make shopping more fun and exciting for customers. The application of Acima’s technology and versatility combined with their customer service and the vast collection of products offers an innovative approach for product financing.
RTBShopper.com is an online store offering consumers rent to buy opportunity without considering their credit. They have a huge collection of brand name products in their store arranged in categories. The store offers competitive monthly payment plans and free shipping on all orders.
Acima provides instant credit and financing for people looking to buy products on lease. Using machine learning technology, they empower merchants and consumers with point-of-sale leasing solution with no credit needed. They have a partnership with many stores and merchants, helping them grow their business using modern technology.
Buying a home is a huge investment for first time home buyers – and their inexperience means that they often have a lot of questions.
The good news is you don’t need to do something heroic to get buyers to trust you. You just need to be ready to address their concerns and answer their questions. So below, we answer seven questions first time home buyers may ask their mortgage brokers.
The first thing you should do is understand the reason why the buyer is thinking of buying a house. Are they buying to build their asset portfolio? Or are they looking for a place to live and settle down in?
If they’re buying a house to build wealth, then yes it’ll be worth it – though you have to be clear that they shouldn’t expect their investment to see immediate growth.
If they’re looking to buy a primary residence, then it depends – after all, the process of buying their dream home could potentially stretch their funds a bit. In that case, you can steer them towards considering a more affordable starter home that they can trade up in the future.
Get to know their reasons first so you can answer honestly and professionally.
2. “I’ve owned a house before. Am I still considered a first-time home buyer?”
The US Department of Housing and Urban Development (HUD) defines a first time home buyer as:
an individual or person who hasn’t owned or bought a principal residence in the last three years;
a single parent who previously owned a house while still married to their former spouse;
a displaced homemaker (such as a stay-at-home spouse) who owned property with their former spouse;
an individual or person who owned a principal residence or property that wasn’t affixed to a permanent place or foundation in accordance with applicable regulations (such as a mobile home); and
an individual or person who owned a property that was not in compliance with local, state, or model building codes, and whose property can’t be brought into said compliance for less than the cost of building a permanent structure.
As you can see, the term has a bit more leeway than its name suggests. For example, if the buyer has owned a property or house within the last three years but their spouse hasn’t, then both of them can still buy a house as first time home buyers.
3. “I have a 401(k). Can I use it to buy property?”
The short answer is yes – but should you? That’s the real question.
A buyer can tap into their 401(k) if they’re short of the funds they need. They can do it two ways – either as a straight withdrawal or as a loan.
However, a buyer can only withdraw from their 401(k) after turning 59 and a half years old (or 55 years old if they lost their job or have retired). Younger buyers can still withdraw their funds, but they’ll have to pay an early withdrawal penalty of 10% of the amount they take out. They’ll also owe income tax on the funds they take out, regardless of their age.
Meanwhile, if a buyer opts to borrow from his or her 401(k), then they’ll have to pay it back – with interest. And the repayments won’t count as contributions, meaning no reduction on their incomes.
So, to put it simply, yes they can use their 401(k). But the trade-off isn’t ideal, so it might be better to look for other options.
4. “I have no cash so can I put $0 for down payment?”
Yes, but there could be some work involved.
A first time home buyer can only put $0 down payment if another entity foots the bill. In this case, it’s the federal government through what’s called a government-backed mortgage.
Three US federal agencies can give mortgage assistance to first time home buyers: the Department of Veteran Affairs (VA), the US Department of Agriculture (USDA), and the Federal Housing Administration (FHA). These agencies will insure all loans given, so lenders are protected in case the borrower can’t pay their debts.
However, you may still have to check if a lender accepts USDA loans. Quicken Loans, for instance, stopped accepting applications since July 2020.
5. “Am I qualified for the $15,000 tax credit?”
The bill hasn’t passed yet, but if it becomes law, the First-Time Homebuyer Act will require participants to be:
a first-time homebuyer, with the same conditions mentioned above; and
an individual who doesn’t earn more than 160% of the median income in their area.
Additionally, the price of the house they purchase must not be more than 110% of the median price in their area. The house should also have been purchased after Dec. 31, 2020.
6. “I don’t have a good credit score. Can I still buy a home with bad credit?”
The short answer is yes, you can still buy a home with bad credit.
Lenders often don’t have a minimum credit score requirement because no two credit scores are the same. A buyer might have a credit score of 400 – a poor score according to the main credit bureaus – but the circumstance behind that score is different from what another borrower with the same score has gone through.
Additionally, lenders often take other things into consideration in their decisions – such as the amount of debt accrued, income, debts in collections, and the size of the down payment.
Different lenders have other requirements but having plenty of cash available for down payment is always a plus. The buyer can always repair their credit and refinance down the road.
7. “I’ve heard 2021 is a bad time to buy a house. Should I go for it or just wait?”
Again, it’s best to assess the buyer’s needs and know the reason why they’re looking into buying a home.
They might be thinking of purchasing because the mortgage rates are so low. But you must remind them that the cost of buying a house goes beyond the purchase price. They also need to consider property taxes, insurance, and upkeep costs. Maintaining a house isn’t cheap and so many new homebuyers fail to realize that.
On the other hand, mortgage rates will likely rise once the pandemic eases up. So, if the buyer is looking into buying a house to cater a growing family, they might have to seriously consider buying regardless of market conditions.
The key is knowing your client’s priorities and going from there.
A first time home buyer is eager, but undoubtedly full of questions. They will be leaning on your advice for their final decision. Getting to know them, building a strong rapport, and answering clearly, honestly, and professionally will instill the trust that will help build lasting bridges for years to come.