Why You Should Avoid No Credit Check Loans Personal finance


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1. They are extremely expensive

If you don’t have good credit, you will unfortunately have to pay more for any loan than someone with better credit, unfortunately. If you are comparing loans without a credit check with regular loans for bad credit, however, the difference is whether you want a high rate or an exorbitant no credit check loans

Many bad credit loans charge around 30% APR. With payday loans, for example, you will often be charged around 400% APR, or more than 10 times that. These numbers may seem abstract, so it’s helpful to see what that actually means for your wallet at the end of the day. Here’s what three different $ 500 loans will cost if you pay them off over a six-month period:

The difference between having good credit and relying on no credit check loans”}” data-sheets-userformat=”{“2″:513,”3”:{“1″:0},”12″:0}”>no credit check loans in this case is $ 706.25 more in interest – more than what you even borrowed initially. It’s high costs like these that a lot of people consider criminal which is why some states ban payday loans.

Since payday loans only last until your next payday, the term length is usually around two weeks, not six months. However, there are cases where you can end up paying that high APR for even longer (even six months or more like in the example above), which brings us to our next point.

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