A personal loan is one of the best financial tools for fulfilling the dream of buying certain assets or dealing with unexpected expenses. Personal loans are highly flexible, allowing one to use the funds in any way they want. Additionally, one is not required to pledge any collateral to acquire these loans. The only catch here is that every financial institution performs a credit check to ascertain the eligibility for the loan.

Purpose of credit check
Credit bureaus are responsible for creating credit reports—an assessment of one’s payment habits based on the details provided by previous lenders. So, if one has repaid their previous loans and credit card bills on time, they will have a good credit score and report. It will increase their likelihood of being approved for a personal loan, as a good credit report assures the lender that the individual will pay their dues on time. Most credible financial institutions will conduct a credit check before issuing a personal loan. But, there are still some ways to secure a personal loan without a credit check.

Ways to get no-credit-check loans

1. Ask a friend or family member
One of the best ways to get a personal loan without a credit check is to reach out to a trusted friend or a family member. In addition to skipping credit checks, this option can also offer flexibility in terms of interest rates and repayment requirements. For instance, one can ask friends or family members to consider lending them some money with minimal to no interest on repayment. When choosing this option, both parties must agree on the lenient repayment terms. Both parties must also be in agreement regarding the number of installments and the date on which monthly repayments need to be made. This will ensure that the loan does not affect the personal relationship or cause any strain or awkwardness in the future.

2. Consider a specialized financial institution
Certain financial institutions, including a few traditional banks and private entities, may be willing to offer personal loans to those with weak credit scores. That said, these institutions almost always charge extremely high interest rates in such cases. This is because when offering loans to those with a bad credit history, the institutions bear a higher risk of default and tend to make up for it by charging higher interest rates. 

Alternatively, one can find certain private financial institutions that offer personal loans with a lenient verification process. That being said, institutions that do not conduct a credit check for verification may still require one to have a regular income. This is a way for the lenders to ensure they get their money back.

3. Try crowdlending platforms
Besides financial institutions, one can also try crowdlending platforms, which are online credit platforms that allow a group of investors to lend some funds to eligible individuals. The eligibility criteria can vary for each platform and investor, and some may be willing to lend money to those with a bad credit history. In most cases, the eligibility criteria for loans on crowdlending platforms are less stringent than those set by regular credit institutions. That said, looking up the interest rates before applying for loans on these sites is crucial, as the rates might be higher for loan seekers with bad credit scores.

4. Apply for a small loan
Financial institutions may not conduct a credit check for small loans. For instance, on loans less than CHF 500, the Consumer Credit Act (KKG), which highlights that lenders are supposed to check the creditworthiness of loan seekers, does not apply. Additionally, certain financial institutions can quickly lend a small amount of money without conducting a comprehensive credit check. So, one can look for such mini loans to get money even without a good credit score. 

Factors to consider
When applying for a no-credit-check personal loan, it helps to research beforehand and consider a few key things to avoid unwanted surprises.

1. Credibility of the lender
When looking for personal loans with lenient credit score requirements, one may come across several lenders, brokers, and advertisements offering deals that seem too good to be true. Here, being wary of potential scams is crucial, as these seemingly incredible deals could be a way to dupe loan seekers who want an instant loan. So, before reaching out to any such lenders offering quick loans and exceptionally low interest rates, one must look them up and check their websites and reviews (if any) to verify if they are credible lenders.

2. Interest rates
Most lenders ready to offer personal loans without a credit check can charge extremely high interest rates. This is because skipping credit checks means a high risk of loan default for lenders. So, before agreeing to the loan terms, checking the interest rates and seeing if one can comfortably repay the loan and the interest is important.

3. Associated fees
When applying for a personal loan without a credit check, one must also be wary of lenders asking for upfront fees or charges. In most cases, such fees are signs of fraudulent activities.