How to Get a Personal Loan With No Credit Check

How to Get a Personal Loan With No Credit Check article image.

It's possible to get a personal loan without a credit check, but no-credit-check personal loans can be limited and may come with disadvantages such as high interest. If you don't need the loan urgently, it may be better to take steps to improve your credit and borrow later. When you need cash now, don't discount alternative borrowing options, such as payday advance apps or loans from family and friends. Here's what to know about getting a personal loan with no credit check.

Can I Get a Personal Loan With No Credit Check?

Yes, you may be able to get a personal loan with no credit check. Lenders that don't require a credit check may look at alternative data, such as income, banking data and rental history, to determine your eligibility to borrow. That said, some lenders that accept alternative data may still require at least fair credit.

Find the best personal loans with Experian.

Personal loan terms vary by lender and loan, so carefully review the details of any loan before you apply. Also know what to steer clear of; for example, avoid payday loans, which come with short repayment terms and high fees. With rates averaging near 400% APR, payday loans can be destructive to your finances.

Alternatives to No-Credit-Check Loans

Because no-credit-check loans often make up for your lack of credit history by charging higher interest rates or fees, it may be in your favor to look elsewhere when you need financing. Fortunately, there are many alternative borrowing options to choose from. Here are some options to consider.

  • Paycheck advance apps: Early payday apps are similar to payday loans in that they can provide you with emergency cash between paychecks and typically require no credit check. Unlike a payday loan, these apps review your finances to determine your eligibility to borrow and charge much lower fees, making them a cheaper option.
  • Payday alternative loans (PALs): If you've been a member of a federal credit union for at least one month, you may be able to borrow a PAL. These are small, unsecured loans designed to provide members with a more affordable emergency borrowing option.
  • Bad credit personal loan: This option could work for you if you want to borrow a traditional personal loan but are concerned you won't get approved due to poor credit. Personal loans for poor credit may be small and come with high interest, so determine what you'll qualify for and what it'll cost to borrow before you apply.
  • Friend or family loans: A loan from a friend or family member could also be an option. Be sure you understand the risks of borrowing from loved ones before you ask to borrow. If you choose to go this route, write up a formal loan contract both parties can agree to.

How to Apply for a Personal Loan

If you've determined that a traditional personal loan is your best fit, follow these steps to apply for a personal loan and improve your approval odds and terms.

  1. Check your credit. Whatever type of loan you apply for, it's always wise to check your credit score first. That way, you'll have a firmer understanding of what exactly you may qualify for. Check your credit score for free through Experian to get a clear picture of your credit score range and how lenders view you as an applicant.
  2. Understand what you need and can afford. Before you hone in on a specific lender and get prequalified, get clear on exactly how much you need to borrow to meet your goal. If you need $2,000 for an emergency home or auto repair, then a $500 prequalified offer won't solve your problem. In addition, review your budget to determine how much you can afford in monthly payments. Taking on a debt with payments that stretch your budget thin can make it difficult to pay on time, which can place you under more financial pressure.
  3. Gather necessary information. Whether you apply for a loan with or without a credit check, you'll likely need to provide documentation to prove your identity and income. While you may not be asked for all of it, have on hand your government-issued photo ID or driver's license, proof of income such as pay stubs and tax returns, your employment and rent or mortgage history and recent bank statements.
  4. Get prequalified. Before you formally apply, get prequalified to see what rates you're eligible for through various lenders. To make comparing offers simpler, use a loan matchmaker like Experian CreditMatch™ . With CreditMatch, you'll see partner offers that you're likely to qualify for based on your credit profile, all presented to you in a convenient hub.
  5. Understand the repayment terms. Before you hit "apply," make sure you review the total cost of the personal loan, which includes fees and interest charges. The APR you see alongside a loan is a good shorthand for checking the amount of monthly interest charges and upfront fees, such as origination fees, which are automatically deducted from the loan amount. Also check for other types of fees, such as prepayment penalties, which can add to the cost of your loan. Finally, review the monthly payment amount to make sure it fits into your budget.

How to Establish Credit When You Have No Credit History

Establishing credit and improving your score over time can help you reach a number of goals―everything from qualifying for a good credit card to renting an apartment to lowering your insurance premiums. If you're totally new to credit, here are tips to start establishing credit now.

  • Become an authorized user. Asking a close and trusted family member or friend if you could be added as an authorized user on their credit card can be an entry point into building up your payment history. You'll build a history of managing accounts, which can help you qualify for a credit card on your own down the line to keep building credit independently.
  • Open a secured credit card. A secured credit card is a type of card that requires you to put down a deposit. That deposit amount serves as your credit limit. Like with any type of credit card, your monthly payments are reported to the credit bureaus to help you build up a positive payment history. After you've built up some credit history, you can graduate to a traditional credit card.
  • Try Experian Go™. Experian Go is a free program that can help you create a credit report if you're currently credit invisible. Establishing a credit report is the first step in your journey to building good credit. From there, you'll receive personalized insights on how to keep building credit going forward.
  • Get credit for your monthly bill payments. Whether you have no credit history or need to improve your credit, getting credit for the bills you pay on time can help you build credit faster. Sign up for Experian Boost®ø to add qualified bill payments, such as popular streaming services, utilities and rent, to your Experian credit report—and possibly see an immediate credit score increase.

The Bottom Line

When you need a personal loan now, a no-credit-check loan could be an option. But there are other routes you can go for emergency money, such as a payday advance app or a payday alternative loan. When you don't urgently need to borrow, it's in your favor to spend time building credit before you borrow. That can help you broaden your options and qualify for better rates and terms.

Whatever financing option you choose to go with, make sure you always manage your debt well. That means budgeting for repayment before you borrow, avoiding extremely high-interest loans and prioritizing on-time payments. As a borrower, it's prudent to keep track of all your debts and their impact on your credit over time. Sign up for free credit monitoring through Experian to stay up to date on changes to your score.