How to Get a No-Credit-Check Personal Loan

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A poor credit score or the lack of credit history can make it difficult for an individual to obtain a personal loan of any kind because he is deemed a high-risk investment. An individual with bad credit can take out a no-credit-check personal loan to get cash, but it's important to understand the true costs and risks.

Find a Lender

No-credit-check personal loans generally come from non-traditional lenders and in the form of a pay-day loan, which is essentially a cash advance on a person's paycheck. Most of these specialized lenders operate entirely online, but some, such as Check Into Cash, have retail locations. The application process asks for basic biographical information like name, address and phone number and employment information such as employer's name and annual income. Because the applicant submits the application online, the approval process happens quickly, sometimes within hours.

Understand the Risks

Most no-credit-check loans must be paid back within two to four weeks and typically only loan up to $5,000. Reputable lenders will only lend 20 to 30 percent of a borrower's net pay. Because they are high-risk, no-credit-check loans have extremely high annual percentage rates, which vary depending on the state and loan amount, but can range from 200 to 700 percent. The Federal Trade Commission warns consumers to avoid lenders that promise guaranteed approval or charge an advance fee before approving a loan.