A no credit check loan allows you to have a loan without a prior credit history by doing exactly as its name suggests – not checking your credit score. Getting a loan with no credit history is possible for people who want urgent money but have a low credit score!

How do No Credit Check Loans Work?

This type of loan is designed for individuals with little to no credit history and is an attractive option for those who have been turned down by loan providers because they lack a long-term credit history or have not established any form of credit.

Understanding how no-credit loans work can help potential borrowers determine whether this type of loan is the best solution for their financial needs.

Loans with no credit check typically require minimal documentation and can be obtained quickly. First, the applicant must fill out an application providing personal information such as name, address, income, and employment history. Once approved, the borrower must provide the necessary documents to receive the funds. The lender will then review this information and determine whether or not to approve the loan.

What are the Features of a No Credit Check Loan?

  • A no credit check loan is given to a borrower even with a low credit score or no credit history
  • You get to have a quicker loan approval process since your credit history is not checked
  • Since there's no credit history for repayment assurance, you need to repay the loan at higher interest rates
  • You get to have a flexible loan tenure period, and a no credit check loan can also be given in higher amounts

What are the Benefits of a No Credit Check Loan?

  • The process of procuring a no credit check loan includes minimal paperwork and documentation
  • The interest rates charged on this type of loan are fixed
  • A no credit check loan is flexible. So, you'll be allowed to borrow a high amount with high tenure for repayment

What are the Drawbacks of a No Credit Check Loan?

  • Unfavourable loan terms for a borrower: Since the lender is lending you a loan even in the absence of proper credit history or a low credit score, the terms end up being in their favour.
  • Higher interest rates: An absence of credit history is a high risk for lenders, so they will charge more interest rates.
  • Shorter repayment tenures: Since the risk of defaulting on a no credit check loan is high, a lender may give a shorter repayment window.

What is the Eligibility for a Loan Without Credit Check?

  • The loan applicant must be above the age of 18 and a resident or citizen of India
  • You should have sufficient income to repay the loan
  • A borrower must be either self-employed or salaried with sufficient income to repay the loan on time
  • Some lenders may only grant you a no credit loan if you pass their minimum salary requirement
  • If you want to get no credit check loan for your business, it must pass the minimum operational period – usually two to three years – depending on the lender

Documents Required to Get a Loan Without Credit Check

Following are the documents you will need to get a loan without checking your credit history:

  • Address proof: including passport, driver's license, PAN card, or voter ID
  • Age proof
  • Income proof: at least the last three month's salary slips
  • Bank statement: last 6 months
  • Residence proof
  • Lease copy (if the loan is secured and you have kept your house as collateral)

Getting a No Credit Check Loan in India

Indian banks or financial institutions do not provide a no credit check loan. However, you can still get a loan with a low credit score or no credit history in the form of secured loans.

A secured loan is when you keep your asset as collateral with the lender, that acts as a repayment assurance, to get a loan.

But in today's evolving world, you can get an instant personal loan without a credit score or low score with the help of fintech companies! So, you don't have to keep your property or jewellery as collateral.

Author Bio:

Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee - India's fastest personal loan platform where self-employed and salaried professionals can easily avail quick loans online in just a few minutes when in need of emergency funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn't stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.