Updated
May 10, 2023 When you have no credit or a poor credit score, you might think you don’t have any loan options. That’s not the case.
Many lenders require a credit check to determine the likelihood of you repaying the loan. However, several lenders rely on factors such as income, employment history, and bank account transactions to qualify for a personal loan without a credit check.
We’ll explore the reputable lenders offering no credit check loans and what red flags you should look out for.
In this guide:
- What are no-credit-check loans?
- Do reputable lenders offer personal loans with no credit check?
- Red flags for loans without a credit check
- Personal loans for borrowers with no credit history
- Personal loans for bad credit
- How to take out a personal loan
- Alternatives to personal loans without credit checks
What are no-credit-check loans?
A no-credit-check loan is a personal installment loan where the lender doesn’t run a hard credit inquiry to reach approval. Instead, they may use alternative factors to justify approving your loan, such as:
- Employment status
- Monthly income
- Bank account transaction history
- Use of collateral
- Education
A no-credit-check installment loan tends to be unsecured (no collateral) and requires regular payments toward the loan. The loan terms are often shorter than traditional personal loans, lasting several weeks or months rather than years.
You’ll also find smaller loan amounts than standard personal loans. The largest no-credit-check loans offer a maximum loan amount of about $10,000, while most range from $250 to $5,000.
If you’ve had a poor track record with your credit, this might seem like a suitable solution. However, the trade-off for not qualifying with a credit check often includes higher interest rates and unavoidable fees. With a reputable lender, you could find a no-credit-check loan with fair repayment terms and more reasonable interest rates.
Do reputable lenders offer personal loans with no credit check?
The no-credit check loan industry has no shortage of predatory lenders willing to loan you money at a steep cost. This is one of the most expensive forms of borrowing, so plan to exhaust other options first. There aren’t many reputable lenders offering personal loans with no credit check, but we found two of the best.
Possible Finance
Possible Loan
- Helps build credit history
- Repay the loan in 4 monthly installments
- No penalties or late fees
Possible Finance is a no-credit-check loan with a conscience. The loan amounts are small—up to $500—but the lender offers affordable interest rates, fast access to funds, and the ability to build your credit. If you encounter financial difficulties, it provides forbearance for up to 30 days.
No late fees, no origination fees, and no penalties make it more appealing than most payday loans. Possible doesn’t require collateral; these are unsecured loans. Plus, you know when you’ll pay off the loan: Repayment terms only stretch to four months.
But be cautious: In certain states, the interest rate on Possible’s annual percentage rates may be as high as 248.67%.
- Loan amounts: Up to $500 ($250 in California)
- Deposit time: Same day
- Origination fee: None
- Late fee: None
- Repayment terms: 4 months
- Interest rates (APR): Varies depending on state rate caps
60 Month Loans
Personal loan
- Longer repayment terms than most no-credit-check loans
- Excellent customer experience ratings
- Higher loan amounts than most payday loans
60MonthLoans.com offers no-credit-check loans in 19 states with more reasonable rates and terms than most other lenders in this category. Due to a relationship with Experian, it only needs to run a soft credit pull and review your bank statements from the last three months.
This company offers unsecured loans that live up to its name: Terms are up to 60 months. A longer repayment term with a larger loan could help you avoid payday loans. Despite an origination fee of up to 5%, the APRs don’t reach hundreds of percent, and the lender doesn’t assess late fees.
- Loan amounts: $2,600 – $10,000
- Deposit time: As soon as the next business day
- Origination fee: Up to 5%
- Late fee: None
- Repayment terms: 12 – 60 months
- Interest rates (APR): Varies depending on the state. The highest interest rate is 35.83% for a $2,600 loan in California.
Red flags for loans without a credit check
The term no-credit-check loan covers several financial products but often refers to payday and title loans. Title loans require collateral (such as a car) to back your loan. If you don’t repay the loan in full, the lender can seize your property.
Getting a loan without running your credit is appealing, but these loans are often predatory. Payday and title loans charge triple-digit interest rates and carry many fees, making it difficult to escape the debt cycle.
According to the Consumer Financial Protection Bureau, the average two-week payday loan has an interest rate of almost 400%. To avoid these loans, look out for the following red flags.
- Rushed process. If your loan officer rushes through the paperwork without letting you read the fine print or pushes you to sign before covering the details, hold off on signing until you’ve had time to review the loan agreement.
- Triple-digit interest rates. Even with bad credit, you might qualify for personal loans with interest rates of 36% or lower, depending on your credit score. An interest rate of 100% or more is a massive red flag. That makes it difficult and expensive to repay the loan.
- Terrible customer reviews. You can find out about a lender by how its customers view it. Sites such as the Better Business Bureau and Trustpilot share what customers have experienced with a company and what you can expect.
- Balloon payments or lump-sum payments. Some payday lenders require a lump-sum payment of the loan amount plus interest at the end of the loan, even if you’ve made consistent monthly payments toward it.
- Lack of clarity around the fee structure. It’s tedious, but reading through the fee structure is essential when choosing one of these loans. If the fee structure leaves you with more questions than answers, you could pay far more than expected.
Even if you have bad credit or are one of the 45.1 million people in the U.S. with no credit or thin credit, more affordable borrowing options outside of no-credit-check loans are often available.
You don’t need to put down a security deposit or put up your car for collateral. Several unsecured personal loans use more than a credit score to get you approved. Avoid the red flags of payday and title loans by exploring our selection of personal loans for borrowers with no credit and bad credit below.
Personal loans for borrowers with no credit history
You repay personal loans in monthly installments and can use the loans for almost anything. With a traditional bank or credit union, you might see repayment terms averaging 12 to 60 months. Some even offer personal loan repayment terms of up to 12 years.
Interest rates for a personal loan often range from 6% to 36%, depending on your credit and financials. The lower your credit score is, the higher your interest rate may climb. These loans require a credit check, but several of the lenders we chose don’t place as much importance on your credit score.
Best for thin credit: Upstart
Editorial rating: 4.8 out of 5
- Uses your complete financial picture to determine approval
- Fast funding
- Works with credit scores as low as 300
Upstart is an online lending marketplace that uses artificial intelligence to automate 82% of its loan approvals. It works with credit scores as low as 300 (the lowest score possible), making its loans accessible to many borrowers, including those with little to no credit.
Instead of focusing on your credit score, Upstart emphasizes income, education, and employment history to approve your loan. Its loans are unsecured, so you don’t need collateral for approval. The rate check process only takes a few minutes and may even prequalify those without credit.
- Credit score category: Poor to fair
- Soft credit pull to check rates? Yes
- Loan amounts: $1,000 – $50,000
- Deposit time: Within 1 business day
- Origination fee: 1% – 8%
- Late fee: The greater of 5% or $15
- Repayment terms: 3 or 5 years
- Interest rates (APR): 6.70% – 35.99%
Best for a secured loan: Best Egg
Editorial rating: 4.8 out of 5
- Considers more than credit score to qualify borrowers
- Excellent customer experience scores
- Average APR discount of 20% on secured loans
If you’re considering a title loan and own your home, you might consider a secured loan through Best Egg instead. It provides a deep discount on the APR for its secured loans and can deposit loan proceeds within 24 hours of approval.
Best Egg’s secured loans are best for people who own their home but don’t want to take out a home equity loan. Best Egg uses your home fixtures, such as built-in cabinetry and light fixtures, to secure the loan. It also offers unsecured personal loans at a higher interest rate.
- Credit score category: Fair to good
- Soft credit pull to check rates? Yes
- Loan amounts: $2,000 – $50,000
- Deposit time: Within 24 hours
- Origination fee: 0.99% – 8.99%
- Late fee: $15
- Repayment terms: 36 or 60 months
- Interest rates (APR): 8.99% – 35.99% for secured loans
Personal loans for bad credit
Best for fair to bad credit: Upgrade
Editorial rating: 4.9 out of 5
- No prepayment penalties
- Excellent customer experience reviews
- Check your rate with no hard credit check
Upgrade offers personal loans of up to $50,000 for those with more robust borrowing needs. Funding is fast, with a deposit as soon as one business day. Upgrade’s wide range of repayment terms can help you choose a monthly payment that fits your budget.
Prequalify with a quick rate check that doesn’t hurt your score, and get offers for repayment terms from two to seven years and interest rates from 8.49% to 35.99% APR. Consider the cost of late fees and origination fees with a loan from Upgrade, but it could be a decent choice for someone with poor to fair credit.
- Credit score category: Poor to fair
- Soft credit pull to check rates? Yes
- Loan amounts: $1,000 – $50,000
- Deposit time: Within 1 business day
- Origination fee: 1.85% – 9.99%
- Late fee: $10
- Repayment terms: 24 – 84 months
- Interest rates (APR): 8.49% – 35.99%
Best for credit card debt: Happy Money
Editorial rating: 4.8 out of 5
- Transparent requirements, rates, and fees
- Streamlines paying off credit card debt
- Designed to increase your FICO score
Happy Money aims to create a transparent personal loan process that enables borrowers to consolidate high-interest debt into one monthly payment for a fixed repayment period. You will need at least a 640 credit score for approval, but Happy Money provides a more affordable interest rate and a lower origination fee than many other offers.
Happy Money’s signature personal loan is the Payoff Loan, which aims to simplify the process of consolidating credit card debt. You can have Happy Money pay your credit cards or deposit the money to your bank account to pay them on your own.
If you qualify for a loan through Happy Money, it will connect you with its lending partners to accept your loan offer. You’ll enjoy no late fees, prepayment penalties, or other fees outside your one-time origination fee.
- Credit score category: Fair to good
- Soft credit pull to check rates? Yes
- Loan amounts: $5,000 – $40,000
- Deposit time: 3 – 6 business days
- Origination fee: 0% – 5%
- Late fee: None
- Repayment terms: 24 – 60 months
- Interest rates (APR): 10.50% – 29.99%
How to take out a personal loan
Taking out a personal loan doesn’t need to be complicated. Most personal loans involve an application process that only takes a few minutes and provides a quick credit decision. Follow these steps to find your lender and apply for a personal loan.
- Start by comparing lenders that offer the type of loan you’re interested in. Find two to four lenders with the rates and terms you’re looking for. It may even help to write down what you like about each one.
- Prequalify with each lender. If the lender does a soft pull on your credit, it won’t hurt your credit score. After you prequalify, the lender shares the potential rates and terms it would approve you for.
- Compare offers from each lender and decide based on what’s best for your finances. Consider the rates, fees, repayment terms, and monthly payment amounts.
- Complete a loan application with your chosen lender. If you don’t need to supply additional documentation, you should have a credit decision within a few hours.
If you’re approved, the funds should hit your account within a few business days. Some lenders may do it within the same day. For more detailed information, read our resource on how to take out a personal loan.
Alternatives to personal loans without credit checks
Consider the following alternatives if a loan with one of our trusted lenders isn’t right for you.
Your bank or credit union
It’s easy to overlook what’s right in front of you. If you have a thin credit file or no credit, you may have missed the opportunity to qualify for a personal loan through your current bank or credit union.
An established deposit relationship with your financial institution could ease some of its credit requirements. This option will likely still require a credit check, but your lender might consider aspects such as:
- The frequency of your direct deposits
- Your average account balance
- How many times you overdraft in a year
- How you’ve managed other credit accounts
- Your employment history
The lender might deny your initial application due to a lack of credit. If that happens, inquire about an option to appeal the automated decision upon review of your banking relationship. This option will work better for someone with no credit than a borrower with bad credit.
Get a cosigner
Another way to qualify for a personal loan is to find someone with good credit to act as a cosigner. This is often a family member or close friend who doesn’t mind helping you. The lender would run your credit and their credit to qualify you for the loan.
You’d still be responsible for making monthly loan payments. If you think you’d have trouble meeting the loan payments, this might not be a suitable option. If you’re delinquent or default on the loan, it damages your cosigner’s credit score, and they’re responsible for repaying the loan.
Borrow against your retirement plan
Instead of a costly payday loan or paying higher interest on a personal loan, you might be able to borrow from the money you already have. If you’ve been saving money with an employer through your 401(k), you could look into a loan against your balance. This option doesn’t require a credit check and often has a low interest rate.
However, please be aware of potential tax implications and repayment requirements if you leave your job or don’t repay the loan. If you don’t repay your 401(k) loan, the IRS treats the outstanding loan balance as a taxable deduction. You’ll pay income tax on the loan balance, and you might pay a 10% early distribution tax.
Most employers also require a waiting period to begin contributing to your 401(k) again after taking a loan. This results in less retirement savings, and if your employer matches a portion of your contributions, you miss out on the match.
If you leave your job for any reason, you may need to repay the remaining balance of your loan within an allotted time frame, or the IRS will treat it as an early withdrawal. That means a 10% early distribution penalty and a 20% income tax withholding. Repayment could even be deducted from your 401(k) vested balance, which means you’ll retire with less money.