No credit check loans
Find out how to get a personal loan without getting a credit check.
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If you don’t want your credit history stopping you from being approved for a personal loan, it might be a good idea to consider a lender that offers no credit check loans. Find out why some lenders don’t require a credit check and discover if this type of loan is right for you.
What's in this guide?
- What are no credit check loans?
- Pros and Cons of no credit check loans
- Types of no credit check loans
- Compare short term loans
- Personal loans vs. short term loans
- How to apply
- Questions to ask before applying
- I have bad credit – should I get apply for no credit check loans?
- Frequently asked questions about no credit check loans
What are no credit check loans?
If you have bad credit and are looking to take out a personal or short-term loan, a no credit check loan may be a good option. There are two main types of lenders who can approve loans for those with bad credit:
- Lenders who don’t perform a credit check. These lenders will not perform a credit check and will instead ask for proof of income in order to decide if you’re capable of making timely repayments.
- Lenders who look past your credit history. Your second option is a lender who checks your credit history but will still approve your loan if you have bad credit. These lenders focus on your current financial situation rather than your credit history and are more interested in your ability to repay the loan.
Why don’t some lenders require a credit check?
Lenders can generally afford to offer no credit check loans by offsetting the risk of lending to those with bad credit with higher interest rates and fees. This is especially true with payday loans, also known as short term loans, which can have excruciatingly high fees. Thankfully, there may be restrictions on the total amount of interest or fees that you can be charged, depending on the province or territory that you live in.
Pros and Cons of no credit check loans
- Poor credit is accepted. Even if you have bad credit or no credit history, you may still be able to get a loan.
- Flexible assessment. Because lenders aren’t relying on credit checks, they will often allow a greater variety of documentation to be used to prove your creditworthiness.
- Potentially fast turnaround. In some cases, you may be able to apply and get access to your money within a day.
- Higher rates. Your interest rate and fees will likely be higher since the lender must asses your risk based only on a snapshot of your finances.
- High chance of getting scammed. If you don’t want to get scammed by a too-good-to-be-true loan, find out if the lender you choose is legitimate by doing plenty of research.
- More severe default consequences. If you default on these types of loans, you may end up losing any assets you used to secure your loan. Alternatively, your guarantor may get saddled with the repayments.
Types of no credit check loans
There are basically three types of loans which don’t require a credit check; payday loans, unsecured personal loans and secured personal loans.
- Payday loans. Also known as short term loans, payday loans come in amounts up to $1,500 and must usually be paid back in 14-31 days. Provincial regulations place restrictions on the amount of interest and fees a lender can charge – but they’re still the most expensive type of loan out there.
- Secured personal loans. While secured loans usually come with more competitive rates and terms, you’ll need to offer up an asset as collateral for the loan. Offering collateral may help borrowers with bad credit get approved, and some lenders will not require a credit check. Keep in mind you can lose your asset should you default on your loan.
- Unsecured personal loans. Most unsecured personal loans will require a credit check, however it is possible to find some online lenders that won’t require a credit check – but you’ll likely be charged higher interest than if a credit check were to be done. You can typically borrow up to $10,000 for anywhere from six months to five years.
- Guarantor loan. This option requires that someone with a good credit score cosign on your loan. Some lenders will essentially ignore your credit history if your guarantor has an excellent credit score and a high enough income.
Compare short term loans
Check the websites of any lenders you’re interested in to confirm they operate in your province or territory of residence.
⚠️ Warning: Be cautious with payday loans
Payday loans are expensive. If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call Credit Counselling Canada from 8:00am to 5:00pm Monday to Friday at +1 866-398-5999.
Personal loans vs. short term loans
Personal loans and short term loans are two different products – and the type you choose will determine how much you can borrow, how much you’ll pay to borrow and how long you can borrow for.
|Loan type||Loan amount||Loan term||Loan cost|
|Personal loan||$500 – $10,000 (and sometimes up to $35,000 with a secured loan)||Six months – five years (sometimes seven years)||4.5% – 55%|
|Payday loan||Up to $1,500||14 – 31 days||$15 – $60 per $100 borrowed (depending on regulations)|
Consider these alternatives before applying for a payday loan:
- Contact your creditors. Speak with creditors or your electricity, gas, phone or water providers about extending payment due dates or working out a new payment plan.
- Consider a personal loan. A personal loan usually comes with much lower interest rates than a payday loan.
- Pay with credit card. While not a long term solution, paying with credit card can help cover emergency expenses. You’ll need to pay off the balance before it accrues interest.
How to apply
While each lender will have their own unique criteria, you can generally expect to have to provide the following information during your loan application. These requirements function as the means by which your lender can get a comprehensive picture of your finances without a credit report.
- Proof of income
- Contact information including, address and phone number
- Monthly bank account statements
- Declaration of any other liabilities
Questions to ask before applying
People with bad credit often adopt a “take what I can get” attitude to loans, but this can result in significant financial loss and ultimately end in debt. Before applying for a loan, ask yourself the following questions:
- What are the associated fees? Responsible lenders will be upfront with you about all fees and charges before they agree to let you borrow from them. You should also check that a lender abides by any regulations.
- What are your loan terms? Lenders offer varying terms for personal loans, with terms between 6 months up to 5 or even 7 years. Choose a loan term that you can manage and suits your budget – and avoid borrowing for longer than you need, or else the loan will cost you more.
- Does the loan offer repayment flexibility? Lenders can be very strict with their repayment options. Some lenders will tailor your repayments to suit your pay schedule from work, while others may let you choose the dates to repay. Make sure you’re aware of any late repayment fees, as these can be expensive and greatly increase the cost of your loan.
- Can you trust the lender? Unfortunately, there are a lot of sketchy lenders who offer no credit check loans – and they can usually be found online. Have a good look at a lender’s website and see how upfront they are about fees, charges and loan terms. You should also check how easy the lender is to contact and whether or not they have a business license.
I have bad credit – should I get apply for no credit check loans?
While you may be tempted to turn to a lender who won’t conduct a credit check, these loans typically come with high interest rates that can be difficult to pay back. If you can handle the repayments, then it might be an option for you. But if you think you’ll struggle to pay the loan back in full and on time, it’s best to steer clear and find more affordable financing. Read through our guide on the 8 alternatives to payday loans for more financing ideas.
You can also work on improving your credit score so that you’re eligible for better products in the future.