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By: rkapur
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Are Guaranteed Loan Approval, No Credit Check Loans A Good Idea?

A guaranteed loan approval no credit check loan might seem to be a Godsend to people with low credit scores. That’s because they know lenders are reluctant to advance money to an individual with a bad credit history.  

But guaranteed loan approval no credit check direct lenders may not be really telling you the whole truth. We’ll explain why in this post and tell you how you can secure funding even if most lenders have turned you down. 

woman reviewing a guaranteed loan approval no credit check loan

Learn how to identify online loan fraud and fraudulent lenders

Can a Lender Really Give Guaranteed Loan Approval?

This is a point that you should understand right away. Guaranteed loan approval no credit check is a term usually misleading. You could even say it’s blatantly untrue.

So, if the phrase, Guaranteed Loan Approval, No Credit Check isn’t true, why do so many lenders insist on using it? 

You need to realize that direct lenders and other companies that offer these loans are trying to entice you by making promises they can’t keep.

So, when they say “Guaranteed Loan Approval, No Credit Check,” it’s just a way to get you to approach them for a loan.

Remember that if a company offers guaranteed loans or advances money to individuals with a bad credit score, you need to evaluate the terms and conditions carefully. 

No financial institution can afford to have a 100% approval ratio.

You can be sure that before approving a loan request, the lender will want to be pretty sure that the borrower has the ability to repay. In most instances, they will carry out credit checks before disbursing funds.

Even if there’s no credit check, they do have eligibility criteria in place.

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Are there really No Credit Check Loans?

No credit check loans and bad credit loans do exist. Many financial institutions offer short-term loans or cash advances without checking your credit score or looking at your credit report. 

Of course, they do take other precautions to ascertain if you’ll repay the loan. 

For example, they would probably ask about your employment history. They could also review your bank account to see how much you earn and spend. 

Some lenders offset the risk of lending to people by asking them to pledge collateral.

man in suit offering money

Types of No Credit Check Loans

There are several different types of no credit loans:

Payday loans

It’s a loan that you repay in less than a month. However, payday loans are usually costly. Payday loan fees are super high!

Credit card cash advance

This is like a personal loan that a credit card company issues.

They’re very similar to payday loans (some even consider them to be the same thing). The credit card company takes this bad credit loan against your credit line. They’re also very expensive.

Car title loans

A car title loan or an auto title loan requires you to pledge your car as collateral. If you fail to pay, you’d be putting your vehicle at risk, though.

Online lenders

Some online lenders don’t check your credit to approve loans. But that’s a minority. Fortunately, many do soft credit checks, which don’t hurt your score. You can hope to find some of these lenders that offer bad credit loans.

Be careful of loan scams.

A guaranteed loan approval, no credit check online loan could seem to be a good option for people with a bad credit score. But there is one downside with these loans. And it’s a significant one.

We’ll cover that in the next section.

How Does Your Credit Score Affect Your Interest Rate?

Most no guaranteed loan approval, no credit check loans are often expensive and could cost you more than you would think.

If you have a bad credit score or don’t have a credit history at all, you’ll likely have to pay a high rate of interest.

This table will give you an idea about how much extra you could pay when you take a no credit check loan.

Borrower’s FICO scoreRisk perceived by the lenderLender’s estimated APR
681 o 850Low risk6% to 19%
600 to 680Medium risk19% to 40%
599 or lessHigh risk40%+
No credit checkVery high risk150%+

A good credit score can get you an APR (interest rate inclusive of other costs) of 10%, while a no credit check loan costs 150% per year. While these are just representative numbers, the rates charged by many direct lenders are similar.

Why do Guaranteed-Loan-Approval, No-Credit-Check Direct Lenders Have High-Interest Rates?

There are two reasons:

  1. The first is that they know you don’t have any other option as traditional lenders are usually unwilling to lend to people without a credit history. 
  2. The second reason for the high interest rates charged on no credit check loans is that lenders are unsure if they will get their money back. So, they charge more, hoping that the higher interest will help them recover the losses they incur on account of borrowers who default. 

Fortunately, there is a better way to raise money for borrowers with a bad credit score or those with no history. 

An alternative with competitive interest rates

At Camino Financial, we do check your credit, but it won’t hurt your score (because our loan application has a soft pull or soft credit check).

We offer business and personal loans to individuals with no credit history or, depending on their situation, even if they have bad credit.

We offer small business loans and personal loans that we designed to meet all your needs. If you’re approved, you could receive cash in as little as 2 business days. We encourage you to apply for a loan today.

Apply For A Loan!


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Pros and Cons of Guaranteed Loan Approval, No Credit Check Loans

We’ll help you decide whether you should opt for guaranteed loan approval, no credit check online loans.

Here’s a table that lists the pros and cons of guaranteed-loan-approval-no-credit-check loans.

Easy to get a loanYou may need to pledge collateral. For example, auto loans require you to leave your car’s title with the lender>
Individuals with no credit history or bad credit scores are eligibleInterest rates can be sky-high—even as high as 664% for a “no credit check guaranteed approval” payday loan
Fast turnaround. You can get your loan approved almost immediatelyIf you can’t repay, you’ll be in a debt trap that can be impossible to escape from
Some lenders will provide you with cash on the same business dayThese loans don’t help you to build your credit score as lenders don’t report your payments to credit bureaus

Should you get Guaranteed Loan Approval, No Credit Check Loans?

No, you shouldn’t! Stay away if you can!

If you’ve found it challenging to raise money in the past, these loans might seem like a great option, but they are not. Loans in this category can have astronomical interest rates. And many borrowers find it difficult to repay them. 

Often, the only solution is to roll over the loan into a new loan. But it is even more difficult to pay the new loan back as the amount payable is even larger. 

What should you do if you need funds urgently and traditional lenders turn down your loan application? Fortunately, there’s a way out.

man applying for a camino financial loan with no credit check

A Lending Alternative that Works for You

A little earlier, we mentioned Camino Financial Small Business Loans and Solopreneur Loans. If you have a bad credit score or even no credit history at all, you are still eligible to apply for a loan to Camino Financial. 

Here’s a brief list of the benefits we offer loan applicants:

  • Bad credit or no history? You can still apply
  • Your application doesn’t hurt your credit score
  • We designed our loan offers to help you work on your financial independence

Plus, we have minimum requirements, and our online application is easy and fast. You can even receive your cash in as little as 2 days!

Apply for a loan today. We have helped thousands of people build a better future for themselves

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