Traditional banking institutions rarely grant loans to borrowers who have bad credit, including those who are in difficult situations. However, these are often the people who most need financial assistance. Fortunately, it’s still possible for someone facing financial hardships to get a loan by relying on alternative solutions.
The no credit check loan
With the decline in purchasing power that has been occurring for several years, a growing number of households are finding themselves overdrawn during the month, with no money to spare. However, no one is immune from unforeseen expenses, such as hospital bills, replacing a defective boiler, or a car repair that needs to be performed urgently. Likewise, when the time comes to pay your credit card or power bill or to make a mortgage payment, your tight cash flow may not let you handle all the expenses. To avoid service cutoffs and payment incidents and to be able to pay for the essential expenses, relying on a microloan, a cash advance, a quick loan, or a payday advance often proves to be the solution. These types of loans can be granted even to people facing financial hardships and who have a bad credit rating, as long as they meet certain conditions.
The criteria for obtaining a no credit check loan
To obtain this type of loan, it’s generally sufficient to provide:
- A completed loan application
- The last two pay stubs for employees
- Bank statements for the last three months
- Proof of residence (power bill, phone bill, etc.)
- A void cheque
- Two pieces of identification.
The analysis of the bank statements must allow the lending institution to verify that the borrower doesn’t have any current microloans, that they haven’t had any debts, that they aren’t in a situation of over-indebtedness, and that they will be able to handle this new commitment. Most of the time, these lenders grant this type of loan without requiring collateral in return.
The other options
If you are unfortunately unable to meet the criteria for obtaining a no credit check loan, there are still two other options to get a loan:
- If you own a valuable item such as a precious jewel, a collector’s item, an antique weapon, a work of art, or a premium brand object, you have the option to turn to a pawnbroker and immediately get money in cash. They may grant you a loan for a thirty-day period. In return, they keep the valuable item as collateral. On the essential condition that the interest on the loan is paid each month, it can be renewed multiple times.
- The other option is to use property that you own to secure your personal loan. You can use several types of assets to guarantee your loan: most often, you will be asked to provide your house or car as collateral, since the value of the asset must be greater than the amount borrowed. The benefit of this type of loan is that—generally speaking—they are granted at lower rates.
Under certain conditions, people facing financial hardships can obtain a microloan, a cash advance, a quick loan, a payday advance, a loan from a pawnbroker, or a secured loan. There is a range of solutions that make it possible to obtain a loan, even for borrowers who are in a complicated personal financial situation.