Going to your local bank may be the only place you think can you go for a secure loan. But now, it’s easier than ever to get a loan online–no hard credit check required. But how can you tell which loans are legitimate and which are too expensive?
It’s possible to find legitimate online lenders with no credit check. But, it’s always better to avoid online payday lenders. Predatory online payday lenders use high fees and interest rates to trap consumers in debt. Luckily, there are online payday loans with no credit check alternatives like 0% APR Instacash from MoneyLion.
Read on to find out more about how MoneyLion can help!
Table of Contents
- What is an online payday loan with no credit check?
- What to expect when applying for a online payday loan
- Why do payday loans have such a bad reputation?
- Comparing a payday loan to MoneyLion Credit Builder Loan
- Things to consider with online payday loan alternatives
- The best online payday loan alternative: Instacash from MoneyLion
- Need more funds? Get a $1000 Credit Builder Loan!
What is an online payday loan with no credit check?
First, let’s discuss what exactly a payday loan is before we talk about how online payday loans work. A payday loan is a short-term unsecured personal loan, which is typically due on your next payday, with extremely high-interest rates. These loans are designed for people who need immediate cash flow in a situation where they do not have the ability to borrow from a bank.
Typically, a payday lender selling point is how easy it is to apply and qualify for a payday loan. Most payday lenders don’t care about your credit score or whether you have the means to pay back the loan. This makes them appealing to people with bad credit or no credit.
Though there is no universal definition of a payday loan, most share the following characteristics:
- A very high-interest rate
- Expensive extra fees, such as a $50 service or lending fee
- The ability to rollover your loan by paying only fees and interest on the due date instead of the principal loan amount
Payday loans may or may not be legal in your state. Payday loans (including online payday loans) are illegal in many states under local usury laws. In other states, strict limits apply to the maximum amount of money you can take out, interest rates, and how long you can have a loan out. In total, 5 states and the District of Columbia have prohibited the use of payday loans.
An online payday loan with no credit check is a payday loan you can receive online regardless of your credit score. Often, these online lenders claim to originate in states where payday lending is legal or use a faux “tribal loan” front.
However, these types of online loans are appealing because you can get them quickly without waiting for an underwriter to access your credit report. However, these loans are also usually much more expensive than many borrowers initially believe.
What to expect when applying for a online payday loan
Although we do not recommend payday loans, these are the steps you should pay close attention to if you do apply for one.
First, you should always research your state’s laws and find out if payday loans are legal in your state. Then, research online payday lending services and choose one that doesn’t require credit checks. Determine how much money you need and request a loan online. Most online payday lenders have quick sign-up processes and you may only need to submit a request form to apply.
The lender will get back to you with a contract for your loan’s terms. This contract will include the amount of money you’re borrowing, interest rate, and any fees you need to pay on the loan’s due date. The contract will also include whether you have the option to roll the loan over to a new term. Avoid rollovers at all costs, you’ll continue the cycle of high interest and swim in major debt. Read the contract and make sure you understand the full terms of your loan.
Most lenders require you to authorize a hold on your bank account with the lender. This is so the lender can automatically withdraw money from your account on the loan’s due date. As soon as you authorize the hold on your account, the lender will transfer money to your account. Many lenders do this automatically as soon as you approve of the hold, but it may take up to one business day to get your loan.
Why do payday loans have such a bad reputation?
Most financial experts recommend that you never take a payday loan because these loans often have very high interest rates. You might pay anywhere from 300% to almost 800% in annual interest when you take a payday loan. This is on top of any flat-rate fee that your lender charges.
Comparing a payday loan to MoneyLion Credit Builder Loan
Let’s compare a predatory payday loan to a no-hard credit check MoneyLion Credit Builder loan to explain just how costly a payday loan can be. Imagine that you need to borrow $1,000. You have a choice between two sources: a payday lender and a Credit Builder Loan.
Let’s you qualify for a MoneyLion Credit Builder Loan and you get a $1,000 loan with a term of one year at 16% annual interest. We agree to give you the loan, you electronically sign the paperwork and you take away up to $1,000. From there, you pay us a monthly payment of $90.73. By the time your loan matures and you make the last payment, you’ve paid a total of $1,089 — $1,000 in your original principal and $89 in interest. In total, you paid $89 to borrow $1,000 for a year.
Now, let’s imagine that you take out a $1,000 from a payday lender. You visit the payday lender and learn that you can get a $1,000 loan with a two-week term at 400% annual interest. There’s also a $50 fee to borrow the money. You agree to the lender’s terms and you get $1,000. By the time your loan’s due date arrives, you owe the lender a total of about $1,203 — that’s $1,000 of the original principal, $153 in interest, and $50 for the service fee. In total, you’d pay over $200 to borrow $1,000 for just two weeks.
Not only will get 12 months to repay your MoneyLion Credit Builder Loan, but you’ll also pay less in interest, get same-day cash, build your credit score and earn money on a portion held in a Credit Reserve account.
Can you see now why payday loans are so hard to payback? Over 50% of people who take out an online payday loan end up defaulting on what they owe. It’s easy to see why it’s best to avoid taking a payday loan at all costs.
Things to consider with online payday loan alternatives
You don’t need to take a high-interest payday loan if you need cash fast. Here are a few things you should look for in an online payday loan alternative.
Quick online signups and instant deposits
Chances are that you don’t have time to schedule a trip to the bank or wait days for your loan if you need fast cash. Look for a lender that offers fast signups and instant deposits.
Low APR and low Fees
Most lenders calculate the interest you pay on a loan using an annual percentage rate (APR). One of the reasons why payday loans can be so difficult to pay back is because they incorporate very high APRs. Compare interest rates and choose a lender that offers an affordable rate when you consider payday loan alternatives. Do the math and see exactly how much you’ll end up paying for your loan when the due date arrives.
Look for the cheapest cash advance rates? MoneyLion Instacash offers up to $250 at 0% APR cash advances
Similarly, you should look for a lender that limits its fees and service charges. Like a high APR, fees and charges can also make it more difficult to pay back what you borrow. With any MoneyLion financial tool, we have no hidden fees and you’ll know exactly what you’re paying upfront.
No impact on your credit ccore
Before you take out a loan, make sure your lender doesn’t require a hard check on your credit. A hard check pulls your credit report and temporarily lowers your score. This can be frustrating if you’re working to build up your credit score. Look for a lender like MoneyLion that doesn’t require any kind of hard credit check before you get a loan.
The best online payday loan alternative: Instacash from MoneyLion
Are you looking for an easy way to get a short-term cash float? Try Instacash from MoneyLion. Instacash is the safe, affordable, and fast way to access cash when you need it most. Instacash advances have 0% APR — so all you need to repay is the principal you borrow. Best of all? No minimum credit score required!
Follow these easy steps to open a MoneyLion RoarMoney account and get access to Instacash!
- First, download the MoneyLion app.
- Go to the “loans” tab and tap on “Instacash Advance” box.
- If you haven’t already, you’ll be prompted to open up a RoarMoney account.
- Once you’re RoarMoney account is set up, set up a direct deposit with your RoarMoney account.
- Next, select the amount of money that you need. You can get up to $250 in Instacash depending on how much money you have coming in on each of your paychecks.
- Enjoy your interest free online cash advance!
Use Your Cash
You’ll instantly see Instacash in your MoneyLion account once you confirm your transaction. You can use Instacash however you’d like. You might need money for an auto repair bill or a last-minute gift — the sky’s the limit. You’ll repay what you borrowed when your next paycheck arrives — with no hidden fees or interest charges.
Need more funds? Get a $1000 Credit Builder Loan!
Don’t let predatory payday lenders convince you to take a high-interest loan. No matter how badly you need money, it’s important to take a deep breath and remember that you have options — including a Credit Builder Loan from MoneyLion. Qualification is simple and you can boost your credit by nearly 48 point within 60 days!
When you download the MoneyLion app, you can choose between Instacash, early payday, Credit Builder Loans, and Overtime. MoneyLion understands that each financial situation needs to be treated uniquely–and save you money!
Get started today and save more cash by downloading the MoneyLion app from the Google Play or Apple App store.
How much interest is charged with no credit check loans?
Often times customers of lenders are unaware of the high-interest charges that can be incurred. Sometimes interest rates are as much as 700%, especially when credit isn’t a factor in loan amounts. MoneyLion provides a more attractive alternative with 0% APR Instacash advances available with a MoneyLion membership.
Does a no credit check loan help my credit?
An advance on your pay or a loan won’t always positively affect credit. Using MoneyLion’s credit builder loans has shown a positive impact on credit for over 70% of users — typical improvements on average can boost credit 30 points.
How much can I borrow without a credit check?
Loan amounts depending on a number of factors for various loan providers. Our Instacash advances allow you to borrow up to $250 without a hard credit check.