Can you get a personal loan with no credit check?

The percentage of Americans with bad credit (a FICO score below 580) is 12.1%, according to Experian data. If you fall in that group, it can be hard to qualify for a personal loan.

This is where no-credit-check loans can come into play. A no-credit-check loan doesn’t take your credit history into account, meaning you may qualify no matter what’s on your report or how low your score is. While this may seem appealing, these loans often come with significant risks, such as sky-high fees or triple-digit annual percentage rates (APRs). We’ll explore these risks as well as potentially better alternatives.

What is a no-credit-check loan?

A no-credit-check loan doesn’t require a credit inquiry as part of the approval process. As a result, these loans can be easier to get, especially if you have bad to fair credit (a FICO score between 300-669).

Some of the most common no-credit-check lenders are payday loan companies. Payday loans are short-term, relatively small loans that usually must be repaid within two to four weeks. Because of their short repayment period and low dollar amounts, it’s not unusual for payday loans to have APRs in the triple digits.

Other no-credit-check loans include cash advance apps and personal loan companies that specialize in making loans to borrowers with bad credit. Buy-now-pay-later (BNPL) may also be considered a type of no-credit-check personal loan.

How does a no-credit-check loan work?

The approval process for a no-credit-check loan is based on factors other than your credit history, such as your employment status, income, or bank account history. If you apply for a secured loan, like a title loan, it’s also based on the collateral that you provide. 

Once you are approved for a no-credit-check loan, a lender will require you to repay funds over a specified term, which could be as short as two weeks. You repay the loan plus interest and/or fees just like any other loan.

While these loans can be easy and quick, lenders typically charge significantly higher interest rates and/or very high fees for these loans. For example, the average interest rate for a 3-year personal loan with bad credit is 33.07%, according to Credible data. No-credit-check loans, like payday loans, typically have APRs that exceed 100%.

Do no-credit-check loans report to the credit bureaus?

No-credit-check loans, like payday loans and cash apps, don’t generally report repayment history to the three major credit bureaus — Equifax, Experian and Transunion. This means, they’re unlikely to help you build credit. However, if you miss payments, the debt could go into collections, which could show up on and hurt your credit report and score.

Personal loans that run a soft credit check, however, often do. If you want to improve your credit, choose a loan that reports the loan and payments to credit bureaus.

Types of no-credit-check loans

No-credit-check installment loans

There are some no-credit-check lenders that offer long-term installment loans, like OppLoans. Such lenders may perform a soft credit check (instead of a hard pull,) which won’t impact your credit score. They also review information from alternative credit bureaus like Clarity Services and Experian. 

These types of lenders may charge triple-digit annual percentage rates (APRs). Loan amounts typically range from a few hundred to a few thousand dollars, with repayment terms usually less than two years. You can find no-credit-check installment loans through online lenders or from storefronts. 

Benefit of high-interest installment loans

• Can build credit: Payments are reported to the three major credit bureaus. In other words, on time payments can help build your score.
• Easy to qualify for: Relative to traditional installment loans that check your credit, no-credit-check installment loans are easier to qualify for. 
• Longer repayment term: Compared to common no-credit-check loans like payday loans and cash apps, no-credit-check installment loans have terms that can last many months. 
• No hard credit pull: When you apply, these lenders don’t conduct a hard credit pull, so you don’t need to worry about your credit score taking a hit. 

Risks of high-interest installment loans

• Potential damage to your credit score: Although they don’t conduct a hard inquiry, no-credit-check lenders may report missed payments to credit bureaus. If you fail to repay the loan, they can send your account to collections, negatively impacting your credit score.
• High interest costs: Though APRs may be lower than payday loans, since terms are longer, you could end up paying more in interest than you originally borrowed.

Cash advance apps

You can download a cash advance app to your mobile phone and borrow a small amount of money quickly. These apps generally don’t perform hard or soft credit checks. Instead, they primarily assess your bank account transaction history to determine your eligibility and the amount you can borrow. 

To qualify for a cash advance you must have an active bank account and, in some cases, a qualifying direct deposit amount. For example, Varo requires you to have $800 during the current or previous calendar month.

Advance amounts typically range from $10 to $750, with some apps capping advances at $250. New users might not qualify for the maximum amount initially but can increase their borrowing limit over time. 

Benefits of cash advance apps:

• Same-day funding: Cash apps can get you money the same day you apply, though it’s often for a fee.
• No credit check: While most cash apps consider your banking history and income, they don’t run a credit check (soft or hard). 
• Optional or no fees for standard delivery: Many apps don’t charge for standard delivery, which can significantly reduce borrowing costs. However, you could wait days for the funds to reach your account.

Risks of cash advance apps

• High fees: Cash advance app fees can be high compared to the amount you borrow. Most apps offer standard delivery of funds within a couple of business days for free, but charge expedited fees ranging from $1 to $15 same-day cash. Additionally, many apps request optional tips or charge subscription fees.
• Potential paycheck gap: Using a portion of your upcoming paycheck to repay the advance can create a financial shortfall. This may lead you to rely on the app repeatedly to make ends meet, creating a difficult-to-break cycle of debt.
• Small loan amounts: Relative to installment loans…
• Short repayment period

Payday loans

Some of the most common no-credit-check lenders are payday loan companies. Payday loans are short-term loans that usually must be repaid within two to four weeks. Loan amounts are relatively low — typically $500 or less — with fees of $10 to $30 charged for every $100 borrowed. 

The relatively short repayment period and high fees are why payday loans often have APRs in the triple digits. For comparison, the average interest rate for a two-year personal loan was 12.49%, according to Federal Reserve data, while the average APR for payday loans is over 600% in some states. 

You can obtain a payday loan from either an online lender or storefront, but there are often better options, such as payday alternative loans from a credit union or fee-free cash advance apps.

Benefits of payday loans:

• Same day funding: You can get money the same day you apply. 
• Easy qualification: Payday loans are designed to be an option for borrowers with bad credit. Easy qualification is offset significantly by ultra-high fees. 

Risks associated with payday loans

• Exorbitant fees: Fees can vary widely by state. In states where payday loans are legal, average APRs can be over 600% (Idaho and Nevada). In states that have implemented safeguards, APRs could be in the 100% range. 
• Short repayment period:  A two-week repayment period paired with excessive fees can make payday loans difficult to repay and lead to a cycle of debt.
• Banned in several states: Payday loans or extremely high-cost payday loans are prohibited in 21 states. 

Buy now pay later

Buy now, pay later (BNPL) apps may perform a soft credit check rather than a hard inquiry to approve your loan. If you fail to repay the loan on time and in full you may be met with late fees. 

The standard BNPL plan is typically paid in four interest-free installments over six weeks. For example, you pay 25% of the purchase at checkout and the remaining amount is repaid in three installments every two weeks thereafter without interest. 

However, Depending on how much you borrow, some BNPL companies offer loans with payments up to 12 months or longer with APRs up to 36%, depending on your credit.

Benefits of BNPL

• Short term no-interest loans: While exclusively available for retail purchases, BNPL lenders work with a wide range of companies, including Amazon. If you need a small short-term loan, consider buying necessary goods with BNPL in order to free up that money to use instead.
• Relatively easy qualification: Though some BNPL lenders may perform a soft-credit check for interest-free financing, BNPL is often easier to qualify for than a conventional loan.

Risks associated with BNPL

• Difficulty budgeting: Utilizing multiple BNPL apps for various purchases can lead to challenges in managing payments, potentially resulting in late fees or even collections.
• Dependency on payment plans: Relying on payment plans for essential expenses, such as groceries, can create a cycle of debt if you struggle to pay off the purchase and cover your other monthly expenses.

No-credit-check loan lenders

One of the most challenging parts of getting a no-credit-check loan is finding a trustworthy lender that offers them. The vast majority of lenders that offer personal loans require credit checks. Whether you’re borrowing from a traditional bank, a credit union, or an online lender, you’ll have a hard time finding a no-credit-check option, but they do exist.

Here are a few no-credit-check loan lenders to consider:

Pros and cons of no-credit-check loans

Pros

• Easy access to money: If bad credit prevents you from qualifying for a personal loan elsewhere, you may still be able to get a no-credit-check loan.
• Same-day funding is often available: Many no-credit-check lenders, including payday loan companies, offer immediate funding on loans.
• May have unsecured or secured options: Payday loans are unsecured loans. Car title loans, another no-credit-check loan option, are secured by your vehicle, which the lender can take if you default to help recoup its losses.

Cons

• High APRs: Payday loans have fees that can send the APR into the triple digits. Other no-credit-check loans, such as title loans, have a reputation for exorbitant APRs (the average is 300%), though they vary by type of loan and lender. Cash advance apps can also have triple digit APRs if you pay to get money the same day.
• Difficult to repay: Because of the quick turn-around times for repayment (often two weeks), it can be difficult to repay loans and fees on time, which can lead to a cycle of debt that's tough to get out of.
• Usually don’t report to credit bureaus: Payday lenders and other no-credit-check lenders generally don’t report your payments to the credit bureaus (though some do, so research lenders carefully), meaning the payments won't help to boost your credit score. But if you can’t pay back the loan and the account goes to collections, your score could drop significantly.
• Often have low loan amounts: No-credit-check loans often have loan amounts of $500 or less. If you need more money, they may not be the right option.

Alternatives to a no-credit-check loan

When you have bad credit, a high-APR option like a no-credit-check loan may feel like your only option. However, there are some alternatives to consider that may be less predatory and less expensive.

Bad-credit personal loan

You don’t necessarily have to get a no-credit-check loan to get a personal loan with bad credit. There are plenty of legitimate lenders that offer personal loans to borrowers with bad credit, typically at a fraction of the interest rate offered by payday loan companies. 

A 3-year fixed rate personal loan for a consumer with a credit score under 599 has an average interest rate of 33.07%. Hard credit checks are generally required for these loans, however, which cause your score to drop by a few points temporarily.

Payday alternative loan (PAL)

A PAL is a type of loan offered by certain federal credit unions to their members. They are small loans with amounts up to $2,000 and repayment terms to 12 months. Rates are capped at 28%, making them a much more affordable alternative to traditional payday loans. Some types of PALs are immediately available after joining a credit union.

Personal loan with a cosigner

If you don’t qualify for a personal loan by yourself, consider asking a friend or family member to cosign your loan. When you apply for a loan with a cosigner, the lender takes into account both your credit scores and income to determine eligibility. If you default on your payments, your cosigner will be responsible for paying back the loan. Not all personal loan lenders allow cosigners.

Secured loan

A secured personal loan is one that requires collateral to qualify, such as a bank account, your house, or your vehicle. Having collateral attached to the loan reduces the risk for the lender, which could mean easier qualification or a more reasonable rate for you. But you will be at risk of losing your collateral if you default.

Friends or family loan

If you have any friends or family who are in a position to lend, consider asking them for a loan. While it’s not ideal, borrowing from a loved one may be preferable to the predatory rates on payday loans. Before you borrow from a loved one, make sure you can pay them back later, and put the terms in writing to avoid any misunderstandings down the line.

Credit-builder loans

These types of loans were created to help borrowers build their credit. But you typically don’t receive the money upfront like a traditional personal loan. Instead, the money is locked in a savings account and is only released once you pay off the loan.

FAQ

What types of no-credit-check loans are available?

The most common type of no-credit-check loan is a payday loan. However, other types of loans that may not require a credit check are car title loans, cash advance apps, payday alternative loans, and high-interest installment loans.

How do I get a no-credit-check loan?

To get a no-credit-check loan, start by shopping various lenders. Because of the high rates and risks commonly associated with these loans, it’s important to do your due diligence to find a good lender. Once you’ve chosen a lender, you’ll be able to complete your application, provide any required financial information, and then receive your loan funds.

Where can I get a no-credit-check loan?

There are several places where you can get no-credit-check loans, including both online and in-person lenders. You may use a local storefront lender to get a payday loan or a car title loan. Or, you may use an app or online lender to get a high-interest installment loan, get a cash advance, or use a buy now, pay later service.