How easy is it to get a $3000 loan with no credit check?

How easy is it to get a $3000 loan with no credit check?
May 31, 2018 northstar

You will quickly find that if you ask your bank to loan you $3000, a credit check is almost inevitable. However, when you are trying to improve or even maintain the credit score you have, a credit check is not ideal because it can damage your score. That’s when many turn to nontraditional lenders who don’t have the same requirements as banks. There are many lenders in Canada who are willing to lend money with no credit check, but that doesn’t mean there aren’t other prerequisites. If you are looking for a $3000 loan, no credit check, there are some additional factors to consider.

Credit Check Alternatives

Since lenders need to have some kind of assurance that the borrower will be able to repay a loan of that size, they collect other documents to protect themselves. Examples of credit check alternatives include bank statements, pay stubs, and collateral.

  • Bank statements – Providing instant bank verification using a program the lender provides or simply sending your bank statements is a common way lenders confirm that you can pay back your loan. They want to find out if you can support another financial responsibility based on the money going in and out of your account each month. If your spending exceeds or is too close to your income, you may be rejected for this loan.
  • Pay stubs – Simply verifying your income for the past several months may be enough to confirm your creditworthiness to the lender.
  • Collateral – This is the weightiest alternative to a credit check because an asset guarantees that the lender will receive something, no matter how things go. An asset can be a mortgage, home equity loan, or a vehicle loan. If your personal loan is secured with collateral, you have a much better chance of receiving a $3000 loan with no credit check because the lender is protected and your credit history becomes irrelevant.

Most lenders require a combination of the first and second alternatives to lend any money at all. However, if you email bank statements from the last few months and a couple paystubs to a lender, you will likely be able to get a loan the same day. Unfortunately, it is very rare that in Canada, only these documents and no credit check will get you $3000. Most will give you up to $1500, and not on your first time borrowing. Likely, the only way you will receive an amount of that size is by providing collateral. This option is known to allow borrowers in Canada $5000 and more with no credit check.

Features of No Credit Check Loans

There are other factors to consider before trying to borrow $3000 with no credit check. Naturally, since the risk factor goes up, so does the interest rate. These types of loans often have interest rates between 28% and 36%, which is a significant amount to pay on several thousand dollars. On top of that, application or brokerage fees – which vary greatly based on the lender – are usually added to the final cost.

The nature of no credit check loans is almost always short-term: the repayment period is usually between three and six months. On one hand, this makes the high interest rate more manageable, but it also means that missing a payment is serious – there is little room for error.

No credit check loans are a great way to acquire cash quickly to get through a difficult time or take care of an unexpected expense. In Canada, receiving a $3000 loan without a credit check requires more than the standard documents for an instant loan. Though it is not impossible, you may need to do some digging to find a lender who is willing to use collateral rather than credit score to back up your loan.