11 Jan 2019 | Written by Mason Roberts
Building credit, like anything else, takes work. It can often take years of owning credit cards and on-time loan payments to create your shining portfolio—but unfortunately life can make that hard, and sometimes the money isn’t there to pay off those debts, particularly with all the amenities of the current day. When you’re looking at online installment loans, typically you will need a solid foundation of credit to even open the door of possibilities to a loan; however, there are options for people with poor or no credit. No check credit loans are available if you know how to look for them, but first thing’s first.
An installment loan is probably exactly what you picture when you think of a loan—it is a loan for a specific amount of money that is repaid with interest through a series of fixed monthly payments. The interest rate is the killer in these situations, and can be influenced by your financial history as well as the loan amount, as can the repayment terms, which can be as short as a few months or as much as 20 to 30 years.
There are also two different kinds of installment loans, which are either secured or unsecured. When your loan is secured, it is secured by collateral such as personal property, and unsecured simply means there is no collateral. Some types of installment loans include the following:
Now that you know what an installment loan is, the question becomes where do you find one? Online installment loans are available for perusal, and it’s a good idea to check out your bank or local credit union. Just remember that if you are considering an online installment loan, vet your potential lender and make sure there’s nothing suspect. If you’re still a little confused between what makes an installment loan different from others, I would suggest checking out Value Penguin’s breakdown of the different types of loans and how they differ from one another.
Before you do anything, check your credit score and see what it is you have to work with. You should also know your debt-to-income ratio, which is a measure of how capable you are of making loan payments each month. You can calculate this by taking your potential monthly debt payments and dividing them by your gross monthly income.
Knowing your debt-to-income ratio and your credit score is important for this reason: online installment loans tend to be more forgiving than the average lender, but your credit is still calculated into the proceedings, and understanding what you have to offer is vital in creating a strong case. No matter where you go to seek your loan, having this knowledge and the following essentials is a smart way to begin your journey.
Now that we’ve defined the loan you’re looking for and how to prepare, the question becomes how do you get one if you have poor or no credit? It’ll be difficult, there’s no doubt about that, but there are no check credit loans—you just have to know how to look for them. More importantly, you have to know what no check credit loans entail.
One option is to find a cosigner. If a lender won’t consider you as a candidate, a cosigner with good credit who is willing to represent you can operate as a stand-in. Cosigners are responsible for any payments you cannot make yourself through the duration of the loan, so these people are typically very good friends or family members. Be careful, as this can create quite the strained relationship if you’re not careful.
If you already have a membership with a local bank or credit union, you might have a better chance with them due to your existing membership. You might even get a good deal on interest rates. Similar to that strain of thought, don’t forget to shop around. There are many online installment loans to consider, and if you speak with multiple lenders, you’ll have a better chance at finding what you need. Keep in mind to do all of your inquiries within a 30-day window, as they will be viewed as a single loan rather than several different ones, which could reflect poorly on your credit score.
Look, it’s never too late to start your line of credit, or to repair an existing one. One of the best pieces of advice to give to someone in their twenties and fresh out of college is to open up a credit card and start spending responsibly. If you build up your credit as early as that, by the time you’re thinking about buying a car or house, you’ll have the background to be considered for a loan.
If you are already well past that particular point of youth, then getting together with a financial planner and scoping out path to better credit might be what you need to do before pursuing whatever it is you need that loan for. Do your research before closing yourself off to any opportunities, but if your loan is a dead end, then address your most pressing financial concerns before moving forward.