Although the majority of people think that it is impossible to have a loan without a prior credit check, in reality this is not the case. Loans without verification are an excellent alternative to traditional bank loans. Rather than providing your credit history and credit score, the creditor will ask you for further evidence to assess your financial ability to repay the loan.
So what evidence do you need to provide to the creditor instead of your credit check? As mentioned above, the creditor will check your creditworthiness through other documents. If you opt for this kind of creditor, you will be asked to provide one of the following documents:
Some creditors who do not do a credit check will ask you for your bank statements to see how much money is going in and out of your account each month. By this, the creditors want to make sure that you have the financial means to assume the payment of a loan. If you have a lot of financial commitments already, the creditor could refuse your request. There are several ways for the creditor to check your bank account:
- Instant Bank Check : Many bankers offer this service. Just go to your online account through software provided by the creditor and the software will automatically take screenshot of your account. Do not worry, the only thing the creditor will have access to is your statement.
- Electronic Verification : The creditor could ask you for an electronic statement, offered almost by all banks.
- Or you can simply fax your bank statement to your creditor.
Documents confirming your income
Another way to check your credit worthiness is to check your income. For the creditor, it is not only important to be repaid on time, but also to lend money to someone who has the means to pay the loan. Most creditors do not want to burden debtors financially.
Well encumbered as a security
If you think your credit history will work against you, then you could opt to apply for a secured loan . Most secured loans do not require a credit check, as the collateral makes the credit history small. Security acts as protection for the creditor. This is a great way to get a loan greater than or equal to $ 5,000. Without prior credit check, your chances of getting a meaningful loan are pretty strong.
Creditors who do not check your credit rating
If you want to get a loan from a traditional financial institution, a credit check is always required. By this, the banks assess the ability of the debtor to pay the debt. If your credit history is not perfect, then avoid using traditional institutions. If you want to get a loan quickly and without a credit check, here are the choices available to you:
- Alternative creditors : You will find them easily in linen. This type of creditors work mainly with debtors refused by banks.
- Private creditors: These creditors do not have to follow the strict steps imposed by the banks.
- Creditor for Targeted Debtors: These creditors work only with a niche of debtors (eg, private mortgagee)
To be approved
The approval process for a loan without a credit check is based on more than just a number. This means that more people are approved for the loans they need; so there is less refusal. These types of creditors are excited by the opportunity to help debtors find a loan with the right amount, terms and conditions.
If your credit rating is low due to your insurmountable debts, please read our article on debt consolidation or consumer proposal