If you apply for a $500 loan at a traditional financial institution such as a bank, you will logically need to do a credit check. However, when you perform a credit check, your credit rating can decrease if you have bad credit. It’s therefore best to turn to less traditional lenders who offer the possibility to obtain a $500 loan with no credit check. If you’re looking for this type of loan, certain factors must be considered.
A $500 loan with no credit check, but with conditions
Getting a no credit check loan in the amount of $500 is therefore possible, but since no credit check is performed, lenders still need to have a guarantee on the amount loaned. At Cash Depot, we can offer you a $500 loan with no credit check if all these conditions are met:
- You have had a valid chequing account for at least 3 months.
- You have been working full-time for at least 3 months.
- Your salary is paid by direct deposit.
- If you have ever gone bankrupt or made a consumer proposal, you must be released.
There are also other alternatives with private lenders, such as the possibility to deposit collateral. Here’s how it works: you deposit an asset as collateral to ensure repayment to the lender via this asset. The asset can be a mortgage, a car loan, or a home equity loan.
The features of a no credit check loan
When you apply for a no credit check loan, there are several aspects to consider and differences between a traditional loan that you take out at the bank and a no credit check loan.
A higher interest rate
In light of the risk factor, which is higher, this type of loan usually has a higher interest rate. Generally speaking, these types of loans have interest rates ranging from 28 to 36%, which is therefore a significant amount in terms of interest. In addition to the interest rate, which is often higher than a traditional loan, brokerage or application fees are usually added to the final cost.
A short-term loan
This type of loan is almost always a short-term loan—that is, it must be used for urgent needs and not for long-term projects. You must repay the loan generally within three to six months. For example, a $500 loan with no credit check can be used to pay an unexpected bill or to repair a water leak in your home. In no case should this type of loan be used for the expansion of your home if the need isn’t urgent!
The no credit check loan is therefore a loan that offers many advantages, but you should also be aware of the disadvantages associated with it. Always remember to find out about the terms of the loan, regardless of the type of loan!