commerci, Stories

The Available Alternatives to No Credit Check Loans

Date

December 05, 2022

Having a less-than-glowing credit history looming over your head makes accessing finance trickier than someone with an amazing credit score.

Many people wonder if there’s a way to apply for more credit when they have bad credit.

Getting a quick cash loan or payday loan when unexpected expenses arise can seem like a quick win, however, short term loans can lead to long term debt repayments. We discuss what your options for lending money with bad credit are, including where you can go to source loans without needing to apply for a no credit check loan.

What are no credit check loans?

As the name suggests, no credit check loans are loans that are processed without running a credit check on the applicant. They are one of the options for borrowers with bad credit, however, as with any personal loan or other finance option, there are pros and cons:

Pros of no credit check loans

For those with poor credit, the main drawcard of a no credit check loan is that their credit file doesn’t need to underpin whether they’re approved for finance or not. This is why some people with a dismal credit report are tempted to apply. With no credit check being performed, the application for credit won’t show up on their credit history.

The downside of no credit check loans

There are of course, some downsides to using no credit check loans. Some of them include:

Cash loans and payday loans can be very expensive The most common no credit check loans are cash loans and payday loans. Unfortunately, the convenience of fast cash loans with no credit check often comes with a hefty price tag in most instances. Payday lending and fast cash loans usually have much higher interest rates than other forms of personal finance.

While they can be an attractive option for when you’re caught short between now and payday, needing to repay the money at high interest rates can quickly snowball your financial problems.

Top Tip

Take the time to look over your loan agreement before signing on the dotted line. Your lender may not have fully discussed the establishment fee or other fees during the application process.

They don’t build your credit for the future For Aussies who are looking to turn a leaf and improve their credit profile by building back their credit score, repaying their existing loans, utility bills and other credit products on time is one way they can build back a positive credit reputation. Loans with no credit checks don’t appear on an applicant’s credit file, therefore, no matter how squeaky clean their conduct is in repaying the loan, it won’t contribute towards building their credit score for the future.

No credit check loans can be a high scam risk Scams awareness week has recently ended in Australia. The week shone a spotlight on how many sophisticated scams operate under our noses every day. Many scammers target people who are looking to invest or borrow money and can disguise a scam as a ‘loan with no credit check needed’. Always conduct your due diligence around lenders offering products that feel ‘too good to be true’.

What other bad credit loans are available other than fast cash loans and payday lenders?

Accessing personal loans with a poor credit score or bad credit history isn’t impossible. Many lenders only offer unsecured loans to applicants with outstanding credit. At Finance One, we are a specialist lender who works to provide Aussies with bad credit a second chance at Finance.

Here at Finance One...

Our range of vehicle finance, personal finance and business finance options provide funds to everyday Australians with poor credit history or a low credit score. Bad credit doesn’t need to be a barrier to accessing finance.

Apply Online Now

We consider applicants who:

Have bad credit history or no credit history.
Are discharged from bankruptcy.
Have defaults on their credit file.

In most circumstances, the eligibility for our range of loan products includes:

Being at least 18 years of age.
Having a regular income source (even if this is Centrelink payments or income from self-employment).

While we do look at your credit history as part of our loan application, we don’t rely just on your credit rating to provide you with finance. Instead, we look at your full personal and financial situation.

Frequently asked questions about bad credit loans

What interest rate will I pay on a bad credit loan?

Interest rates vary from applicant to applicant depending on how much they’re looking to borrow, their age, income and whether the loan is secured or unsecured. To calculate how much your loan product repayments would be at different rates of interest, you can use our free car loan calculator tool.

Can I get guaranteed approval for a bad credit loan?

Unfortunately, there is no such thing as guaranteed loan approval. Even no credit check loans still rely on your income to support the repayment schedule and can be declined by the lender.

Why does a fast loan come with a higher interest rate?

Offering fast loans to applicants with a bad credit history is a risk to the lender, therefore, lenders help to mitigate this risk by charging much higher interest rates.

How can I get a lower interest rate on my loan?

If you’d like to negotiate a lower interest rate with your lender, it pays to have a regular income and a solid bank account history. Regularly overdrawing your bank account can go against you when trying to access credit. Also, consider offering some extra money as a down payment on your loan — this is one way to help boost your chance of accessing lower interest rates.

Who is the best bad credit lender in Australia?

At Finance One, we have a long history of supporting Aussies with their finance needs where other lenders couldn’t. Our dedicated team of loan professionals understand your unique situation and are here to work with you, not against you when it comes to getting your credit application approved. Contact Finance One to learn more about how we can source bad credit finance for you.

Apply Online Now

Normal lending criteria apply. Fees and charges are payable. Terms and conditions apply.

Finance One means:
Fin One Pty Ltd – ABN: 80 139 719 903
Australian Credit Licence: 387528

Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent advice regarding your legal, financial, taxation or other needs, to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information. All loan applications are subject to normal lending criteria. Fees and charges payable. Terms and conditions apply.

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