People who have bad credit scores often do not get a positive response from traditional loan lenders and so they look for a no credit check loan. This type of loan serves as a short-term measure to deal with a financial deficit.
If you are thinking of considering this option, then take some time to understand its pros, and cons before forming a decision.
Advantages of No Credit Check Loan
So, let us look at in what ways can no credit check loans serve your financial objective:
- Short-term monetary situation
This loan can be used for bridging the gap between the payday, and the middle of the month. This is beneficial when the food is required, rent is due, or money is needed to get on to work.
Bonsai Finance is a reputed financial firm that provides various types of loans to meet the financial urgencies of people.
- Speed of Availability
This loan gets you the payment quickly on the same day without any need of performing the paperwork.
- No credit check
Another important benefit of this loan is that people who have a low credit score, a loan default, adverse credit, bankruptcy, etc. can also avail this loan.
- No limitation on use
Unlike traditional loans that are strictly allowed to be used for a specific task, you can use the loan for any type of work like a holiday.
Disadvantages of No Credit Check Loan
Here are a few disadvantages of a No Credit Check Loan.
- Overcharging interest rates
This is the biggest disadvantage of no credit check loan and makes it a dangerous option too. In this loan, a person can be charged with a high rate of interest that is around 50% to 60%. This is due to the reason that it is an unsecured type of loan.
- Missed payment
Another drawback is that a high APR rate implies a quick increase in the credit amount and the inability to pay it later. This is what results in missed payments that are often seen in this type of loan.
- Provides the only short-term financial solution
Due to the high APR rate, this loan can’t be viewed as a long-term financial solution. This loan leaves the person with more financial difficulties.
No credit check personal loans should not be considered as a means to get financial assistance. The APR rate of these loans can quickly rise and make monthly repayments simply unaffordable. It is suggested to seek the assistance of your friends and family before opting for this type of loan.