No Credit Check Loans from Direct Lenders

Applying for a loan when you have bad credit is like walking on thin ice; you never know if you’ll get accepted. That’s why no credit check loans are getting more popular day by day. But how can you get such a loan without paying a broker to find you a lender? The answer is direct lenders.

We’ll discuss everything you need to know about no credit check loans from direct lenders in this article. So stick around!

What this article covers:

What Are No Credit Check Loans from Direct Lenders?

no credit check loans from direct lenders

Late and missed payments happen to everybody, and while they’re easily fixable, they leave dents in your credit history and make you less eligible for loans. That’s where the importance of no credit check loans shows.

No credit check loans are a type of loan that lenders give out without considering the borrower’s credit score. So even if you have bad credit, you can take a loan without an issue. However, this is somewhat limited to online lending services. Banks prioritize credit scores and won’t give you a loan if they disapprove of your history.

As for direct lenders, they’re institutes or people who give out loans directly without third-party involvement. The third party is a broker or middleman who charges fees for connecting the lender with the borrower. While they’re beneficial because they help you reach a lender quickly, they’ll cost you money that you might not be ready to pay.

But where can you find direct lenders in Australia? Online lending services, of course!

Many online lending services match you with a lender without charging you fees. Instead, they’ll merely connect you with them, and you’ll have the freedom to contact the lender and agree to the terms and conditions regarding loan payment.

Pros and Cons of Applying for No Credit Check Loans from Direct Lenders

Getting a loan directly from a person without paying broker fees while your credit score is low seems like too ideal of a scenario, so there’s got to be a catch. Here’s a list of the pros and cons of applying for such a loan.

Pros

Let’s start with the pros.

Flexibility

Direct lenders are often flexible with their terms and conditions regarding loan payments. And if you’re late for one payment, they might not mind.

Also, you’ll get to customize the loan according to your situation. So whether you’re getting a loan for medical bills, a mortgage, or even a holiday, you’ll be able to customize the payment amount, dates, and methods.

Meanwhile, banks often have fixed loans and interest rates that you won’t get to personalize. Also, you’ll have to stick to specific dates for payment, or you’ll be subject to a fine or increase in interest.

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Experience

Every direct lender is often experienced in a specific type of loan. For instance, some lenders specialize in home equity and mortgage loans, while some focus on personal and payday loans. This can benefit you if you want financial advice on your current situation. Also, if you’re applying for a loan for the first time in your life, they’ll tell you how the process goes.

High Chances of Acceptance

Banks put more strict conditions regarding loans all the time. For example, you only have a chance of acceptance if you have a high credit score and excellent cash flow.

However, no credit check loans have high acceptance percentages since they depend on other criteria. Also, direct lenders tend to be lenient with their conditions. So you’ll find one that deems you suitable for a loan sooner or later.

Fast Loans

The best point about applying for a no credit check loan is that it’ll take you no time, which is convenient if you need cash for an emergency.

You’ll have to fill out tons of paperwork in a bank and answer many questions. And even then, you might not get accepted. Online lending services, on the other hand, have accessible applications that you can fill out in a short time. Then, they’ll take a few minutes to connect you to a direct lender.

Since the lender won’t run a check on your credit score, they won’t take a long time to get back to you regarding the acceptance of your loan. And after they contact you, you’ll be able to receive the funds within 24 to 48 hours.

No Third-Party Involvement

When a broker helps you meet a lender, they charge fees for their services. Some brokers charge fixed prices, while some take a percentage from the loan.

No matter how much they take, it’s inconvenient because you won’t be able to benefit from the loan as you wanted, especially if it’s a small no credit check loan, like a $1,000 loan. Also, contacting both the broker and the lender is a hassle that you might not be in a suitable condition to do if you have an emergency.

Cons

Now, let’s dive into the cons of applying for a no credit check loan from a direct lender.

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High-Interest Rates

Since direct lenders don’t run a credit check and thus don’t have enough insight into your financial habits, they often impose high-interest rates as compensation for the risk they’re taking. While this is expected, it might be more challenging for you to pay back the money.

This is especially the case for small loans, like $300 loans with no credit check, because lenders can’t request collateral for them. So the more risky the lending process is, the higher interest rates you’ll have to pay.

Less Trustworthy

Banks are the most trustworthy loan providers, while direct lenders lag in this aspect. Although online lending services have reliable networks of lenders, taking money from someone you don’t know isn’t ideal. So you’ll need to run background checks on the direct lender you’re contacting.

No Guaranteed Approval

The Australian Securities and Investments Commission (ASIC) doesn’t allow guaranteed approval for no credit check loans. They think that direct lenders should assess the borrower’s financial situation and ensure they’ll be able to pay the money back first. So you’ll never have a guarantee that a lender will accept your loan.

However, we wouldn’t worry about this point too much because no credit check loans from direct lenders have high acceptance chances.

Why Would You Need a No Credit Check Loan?

Many situations necessitate applying for a no credit check loan. Here are the most common ones.

Bad Credit Score

When you frequently miss bills or pay less money than you should, your credit score goes down. And when you apply for a loan from a bank, the first step they do is check your score. If it’s low, they’ll be more likely to reject the loan. So you’d need to apply for a no credit check loan instead.

Emergency Expenses

When you ask your bank for a loan, they take their time running background checks on your financial situation and credit score. Also, they’ll give you tons of paperwork to fill out, which can be time-consuming. Waiting for a long time won’t be convenient if you have an emergency that you need the money for, like a medical bill or sudden job loss.

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On the other hand, no credit check loans are relatively fast, thus more suitable for emergencies.

Thin Credit Files

While thin credit files aren’t as worrying as bad credit scores, they aren’t ideal either because they don’t give enough information about your financial situation. So if a bank can’t get a complete picture of your financial habits, they’ll likely reject your loan. You don’t have to go through this if you apply for a no credit check loan, though.

Common Types of No Credit Check Loans

There are three common types of no credit check loans that direct lenders approve of: small personal loans, secured loans, and unsecured loans. Here’s a quick roundup of them.

Small Personal Loans

In Australia, small personal loans are capped at $2,000 to protect borrowers and lenders. Also, they’re paid within a short time frame that ranges from 16 days to one year. The exact time depends on the amount of money and the flexibility of your lender. For instance, if you take a no credit check $1,500 loan, you’ll probably have to pay it back within 6-8 months.

Small personal loans often have high-interest rates, but luckily, the ASIC caps what the lenders can charge you. Here’s a quick list of the charges they’re allowed:

  • Monthly account-keeping fee (capped at 4% of the loan)
  • One-off establishment fee (capped at 20% of the loan)
  • Government charges
  • Default charges (capped at 200% of the loan)
  • Enforcement expenses

Secured Loans

No credit check secured loans give lenders peace of mind as borrowers must provide collateral for their loans. To elaborate, if a borrower provides their car as collateral for a $5,000 no credit check loan, the lender has the right to seize the vehicle if the borrower doesn’t pay back in time. That’s why secured loans are often large and range from $5,000 to $25,000.

Unsecured Loans

Loans that are higher than $2,000 and don’t require collateral are called unsecured loans. They’re the riskiest type of loan, so naturally, they have higher interest rates. Also, most lenders run credit checks before giving out such loans, so getting a no credit check unsecured loan isn’t that common.

How to Apply for a No Credit Check Loan from a Direct Lender

We’ll tell you how to use online lending services to apply for a no credit check loan from a direct lender. So take a look at these steps.

1. Check Your Eligibility

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Before applying for a loan, you should ensure you’re eligible for it. To take a loan in Australia, you should:

  • Be an Australian citizen or permanent resident
  • Be 18 years or older
  • Have a reliable form of contact
  • Have an income source
  • Have a bank account

Also, make sure you prepare the following documents because most direct lenders will ask for them:

  • Government-issued ID
  • Driver’s license
  • Medicare card
  • Passport
  • Bank statements from the last three months

2. Fill Out an Online Application

Online lending services often have easy-to-fill online applications that request your personal information. Some of the info you’ll have to provide is:

  • Full legal name
  • Date of birth
  • Form of contact (email, phone number, or both)
  • Relationship status
  • Banking information

The rest of the forms might differ from service to service, but they all require the above list.

3. Contact a Lender

After filling out the application, the online service will verify your information and then match you with a lender who approves your financial situation and ability to pay back the money. After that, you’ll contact them and agree on the terms and conditions of the loan and the payment method.

4. Receive the Loan

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Most direct lenders will give you the funds within 24-48 hours. So after agreeing on a payment method, you can receive your loan in no time.

FAQs

How Can I Improve My Credit Score?

To improve your credit score, you should pay your bills on time, review your credit report for any mistakes, avoid applying for new lines of credit, and close your old and paid-off credit card accounts.

How Much Can I Borrow with No Credit Check Loans?

While it depends on the direct lender the online lending service connects you to, the average range goes from $300 to $10,000.

Conclusion

When in a financial emergency, you don’t have to worry about your bad credit score because you can easily apply for a no credit check loan from a direct lender. This way, you’ll have a higher chance of acceptance and won’t have to pay extra cash to a broker. Luckily, many online lending services can connect you to a direct lender within minutes of visiting their sites.

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