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Thursday, July 23, 2009

Are There Bank Loans For People With No Credit?

The number one rule of banking is to lend money to people that are a manageable risk. If you don't have any risk you may pose excess risk to a bank. They have no idea whether you will be able to repay the loan or not. This means you will be treated like a person that has bad credit.

If you have the option then getting a bank loan is better than getting one from a random financial institution as banks are more reliable and will have regulations they must follow. Most loans that do not require a credit check will not be regulated by law and many lenders can exploit this fact. Banks can offer both secured and unsecured no credit loans, but you will pay higher interest.

If you have a home then it may be possible to apply for a home equity loan based off of the value of your home. Home equity loans often do not require a credit check as you have already proven that you have collateral by taking the loan out based on your home. Many banks will offer no credit loans through their online programs. Whenever you take out a no credit loan then you should always be careful to read all of the terms and agreements before you sign a contract.

Other loans available are payday loans and payday loans do not require a credit check. This type of loan is a short term, small value loan that has very high interest rates. You get the money from the payday loan and then when you receive your next paycheck you are required to pay all of the money back with interest.

No credit check loans can be used if you find yourself in a financial situation and need help. Emergencies occur and everyone may need some additional cash at some time. It is always better to take out a loan versus charging your credit card to the limit.

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