Editor’s note: NerdWallet uses different methodologies to rate high-interest personal loans, cash advance apps and buy now, pay later apps. Read more about star rating methodologies for personal loans, and cash advance and BNPL apps.
What is a no-credit-check loan?
A no-credit-check loan doesn’t require a review of your credit history or credit score. Omitting credit checks is common with payday lenders and other companies that offer high-interest loans.
These loans are often a few thousand dollars or less and can be used to cover an emergency or bridge an income gap. They typically have short repayment terms of a few weeks or months.
Not knowing your credit history makes the loan risky for the lender, and many no-credit-check installment lenders balance that risk by charging sky-high annual percentage rates. The loans’ short terms can also make them difficult to repay on time and potentially trap borrowers in a cycle of debt.
» MORE: What’s the difference between payday and installment loans?
Soft vs. hard credit inquiry
Even a no-credit-check lender may do a soft credit inquiry. This type of credit check can be done without your knowledge, but it doesn’t affect your credit score. Soft checks happen when you prequalify for a personal loan or receive a credit card offer in the mail.
A hard credit check requires your consent. It’s triggered when you submit a formal application for credit, like a mortgage or car loan, and it usually causes your credit score to dip by a few points. Hard credit inquiries typically affect your credit score for one year but stay on your report for about two years.
» LEARN MORE: Soft vs. hard credit inquiries
No-credit-check loan example
A one-year, $2,000 loan with a 36% APR will have monthly payments of $201. That same loan through a no-credit-check lender with an APR of 200% would run you $396 a month — nearly double the cost.
» MORE: Calculate your installment loan payments
Here are examples of that same 12-month, $2,000 loan repaid at different APRs.
Credit score | Example APR | Monthly payments | Total payments |
|---|---|---|---|
Excellent (720 or higher) | 11%. | $177. | $2,144. |
Poor (629 or lower) | 36%. | $201. | $2,411. |
No-credit-check | 200%. | $396. | $4,746. |
Types of no-credit-check loans and their risks
You can get a no-credit-check loan from many different kinds of lenders, but some are riskier than others.
No-credit-check high-interest installment loans
No-credit-check high-interest lenders may do a soft credit pull to approve you, and they may review information from alternative credit bureaus like Clarity Services from Experian, but they won’t do the hard credit inquiry that causes your credit score to dip.
These lenders operate online or from storefronts and charge triple-digit annual percentage rates. Loan amounts are usually a few hundred to a few thousand dollars, and repayment terms are typically less than two years.
Risks of high-interest installment loans:
Your credit score may be damaged. No-credit-check lenders may report missed payments to the three major credit bureaus and send you to collections if you fail to repay the loan.
Short terms make it difficult to repay the loan on time. The lender may offer to extend your loan term to lower your monthly payment, but this often keeps the borrower in debt for longer and drives up the total cost of borrowing.
No-credit-check cash advance apps
You can download a cash advance app to your mobile phone to borrow a small amount of money quickly. These apps generally don’t do hard or soft credit pulls. Instead, they rely mostly on your bank account transaction history to determine whether you qualify for an advance and how much to give you.
Advance amounts are usually between $10 and $500, but some apps cap advances at $250. New users may not qualify for the maximum advance amount, but can increase their advance amount over time. The apps typically take repayment for an advance from your next paycheck.
Risks of cash advance apps:
High fees. Cash advance app fees are high for what you get. Most apps say they’ll take a couple of days to deliver funds unless you pay a fee — often ranging from $1 to $25, depending on the advance amount. Many also ask for an optional tip or charge a subscription fee.
Upcoming gap in your paycheck. If you can’t tolerate spending part of your upcoming paycheck to repay the app, you could end up returning to the app for more cash to make ends meet —a cycle of debt that’s difficult to break.
No-credit-check buy now, pay later loans
Buy now, pay later apps usually qualify applicants with a soft credit check rather than a hard inquiry. A BNPL company may increase your loan amounts over time as you borrow and repay the app.
When you use the common pay-in-four plan most BNPL companies offer, you pay for 25% of the purchase at checkout and then rest in 25% increments over six weeks. There’s usually no interest with these payment plans, but some companies charge a late fee (usually below $10), and returns can be tricky.
Risks of buy now, pay later:
Difficulty budgeting. If you use multiple BNPL apps to make multiple purchases, you could find yourself struggling to keep track of payments, racking up late fees and you may even be reported to collections.
Growing dependent on payment plans to make ends meet. Relying on these payment plans for basic needs, like groceries, can lead to a cycle of debt if you’re unable to pay off the purchase and cover the rest of your monthly expenses.
Bank loans
Some banks provide small-dollar loans to existing customers. Wells Fargo, for example, provides loans up to $500 with a hard credit check only after you’re approved, so rejection doesn’t impact your credit. In some cases, your relationship with the bank and account history may be factors for these loans, which could mean the bank isn’t relying as heavily on your credit score to determine eligibility.
Risks of bank loans:
Existing customers only: Small bank loans are typically only available to customers with at least a few months of banking history.
Missed payments impact credit: The bank may report payments to the major credit bureaus, meaning missed payments could hurt your score.
Payday loans
Payday lenders may not do a soft credit inquiry or review your bank account information to determine whether you qualify. Instead they require only proof of identification, income and a bank account.
You can get a payday loan from an online or storefront lender. Loan amounts are typically $500 or less, the average annual percentage rate is around 400% and the loans are usually repaid from your next paycheck.
Because of their high rates and short repayment terms, payday loans are known to cause consumers to slip into difficult-to-break debt cycles. NerdWallet doesn’t recommend payday loans if you can avoid them.
Risks of payday loans:
Cycle of debt: Plenty of research shows that consumers who get payday loans often must borrow again after repayment or pay a fee to extend repayment.
Collections: These lenders don’t usually report to the credit bureaus, but borrowers who can’t repay are often subject to high fees and may be sent to collections.
How to shop for no-credit-check loans
If a loan with no credit check is your best option, here are a few tips to avoid a predatory lender.
Look for the APR. An APR helps you evaluate the loan’s affordability and compare it with other loans. Lenders are required by law to disclose the loan’s APR before you sign a loan agreement.
Find a lender that assesses your ability to repay. Reviewing your bank account information, doing a soft credit pull, checking alternative credit bureaus and requiring proof of income are all signs that a lender wants you to repay the loan. A lender that doesn’t check your ability to repay may be counting on you to refinance the loan for one with a longer term or get a second loan to pay off the first, which is how a debt cycle begins.
Understand the repayment terms. Whether you agree to repay the money in two weeks or a few months, know your payment date and how the lender will collect the money. If the lender debits your bank account, review your budget to make sure the money will be there so you don’t overdraw.
Review the amortization schedule. If the loan requires multiple payments, ask to see the amortization schedule, which is a table that shows how much of each payment goes toward principal and how much to interest. At least part of each payment should pay down the loan’s principal.
Look for the lender’s license. Lenders must register in all states where they operate. Many list their licenses on their websites.
Beware of scammers. A reputable lender won’t ask you to pay them before you get a loan. If the lender asks for a gift card or cash before they lend money, it’s likely a scam.
» MORE: How to spot a personal loan scam
How to get a loan with no credit check
Before you get a no-credit-check loan, consider all your alternatives. In general, the easier a loan is to get, the more expensive it will be.
Check your credit and bank account histories: It’s helpful to know what lenders will see when they review your application. Even if a no-credit-check lender only does a soft credit pull, it’s helpful to check your credit reports before you apply to understand what may be working against you. Because these lenders often look at cash flow information in your bank account, it may also help to see how much money you’re keeping in the account at the end of every month.
Do your research: The last thing you want when you apply for a loan is to be scammed, so research the lender you plan to use to evaluate their legitimacy and learn the pros and cons of borrowing with them.
Gather required information: In general, even a lender that doesn’t check your credit will likely ask for the basics that all lenders require on an application: Your name, birthdate, address, email, phone number and Social Security number. The lender may also ask you to connect your bank account. Be sure to have this information ready before you apply.
Apply: Once you request a loan, the lender may do a soft credit check, but rest assured that the lender must notify you before doing a hard inquiry, per the Fair Credit Reporting Act. The lender should give you an approval decision quickly after you apply.
Make a plan to repay: Payday and high-interest installment lenders must disclose the loan’s APR before providing you a loan, but cash advance apps and BNPL companies don’t have to. Before you accept a loan, make sure to understand how much you’ll be required to pay and when so you can make a firm plan to make the payments on time and avoid getting stuck in a cycle of debt.
Did you know...
Per the Military Lending Act, lenders can’t provide loans with APRs above 36% to active duty military members or their dependents. That’s why, if you’re a military member or dependent, you may be rejected for a high-interest no-credit-check loan outright.
No-credit-check loan alternatives
» READ OUR GUIDE: Find alternatives to payday and other high-cost loans
Online loans
Some online lenders accept borrowers with poor credit — even those with credit scores below 600 — and consider additional data, like employment status and outstanding debts. Online lenders offer prequalification, which involves just a soft credit check that doesn't impact your credit score. If you qualify, your loan will have a higher rate, but typically not above 36% APR.
» COMPARE: Best bad credit loans
Co-signed or joint loans
If you have a low credit score, consider adding a co-applicant with a better credit profile. A co-signer is someone who vouches for you but doesn’t have access to the loan funds, while a co-borrower on a joint loan shares the loan funds and repayment responsibility. In either case, your co-applicant is responsible for loan payments if you fail to make them.
» MORE: Compare co-signed and joint loans
Secured loans
Secured loans usually have softer credit requirements than unsecured loans, so those with fair or bad credit scores may get a larger loan or lower rate. Most online lenders accept a vehicle as collateral, while banks and credit unions prefer a savings or investment account. Weigh the benefit of adding collateral against the risk of losing it if you miss too many payments.
» MORE: Compare secured personal loans
Family loans
Ask someone you trust to help you pay a bill, cover rent or spot you cash for groceries. It may be difficult to ask, but it will preserve your credit and keep you from entering into a contract with a high-interest or payday lender. You and your family member can draw up a contract detailing the loan amount, repayment term and how you’ll repay them.
» MORE: How to borrow from and lend to family
Payment plans
If reducing a credit card bill, rent, utility bill or mortgage payment for a month or two would provide enough relief, inquire about a payment plan. Some creditors and utility companies have hardship forms you can use to request an extension, but you may have to reach out to your landlord or lender.
Credit union loans
Many credit unions offer small personal loans starting around $500. To qualify you, they may consider information other than your credit score, like your history as a member. Federal credit unions cap rates for personal loans at 18%. Some credit unions also offer payday alternative loans, or PALs, which are small-dollar loans with maximum APRs of 28%.
Capital Good Fund
Capital Good Fund is a nonprofit lender that accepts borrowers with thin or no credit history for emergency loans up to $1,500. The lender doesn’t have a minimum credit score requirement but will review any credit history you have. Capital Good Fund also provides loans for immigration expenses and home weatherization in some states.
Methodology
NerdWallet uses different methodologies to rate high-interest personal loans, cash advance apps and buy now, pay later apps. Read more about star rating methodologies for personal loans, and cash advance and BNPL apps.
