Do smaller personal loans require credit checks?

Depending upon the lender you have chosen to work with, some small personal loans do not require any type of credit check. Lenders instead will ask for the following information:

•     A recent bank statement
•     Your last tax return
•     Proof of income
•     Your last 2 pay stubs

The lender will then contact your employer to make sure that you aren’t lying and that you really do work there and make that amount. Individuals with bad credit are risky borrowers so lenders are going to punish you with high interest rates and other fees. Since they are not asking for a credit check, they are going to offer lower loan terms. This is the only way to make sure they will make back the money they lend you because they aren’t going to lend you a large amount of money.

If you repay the loan in a timely manner and you demonstrate strong credit worthiness, they will offer you additional loans in the future with larger loan terms. One loan option they may be able to offer you is mortgage loans bad credit options that will help you get into a nice home at an affordable rate.

Some people have really bad credit and they cannot obtain small personal loans. The next option you have is to apply for payday advances to meet emergency needs. Payday loans are given to anyone that has a job. You are borrowing from your future paycheck, so you need to be really careful about how much money you borrow. The interest rate is pretty high on a payday loan and you can end up with an APR of 430%. The reason for the high interest rate is the loan term. A payday loan has a 7-14 day loan term. You are required to repay the money on your next payday or you will face the high interest rates. Payday loans can be used for an emergency, but they can put you on the path to financial ruin in a hurry so be careful.