No Credit Check Debt Consolidation Loan

Writer and editor - Joseph Smith | Updated on 2020-05-26
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Bad or nonexistent credit leads many people to believe that obtaining a loan is impossible. While difficult, it’s essential to understand you’re not alone in this situation. A widely prevalent problem means demand. Banks, credit unions, and financial institutions offer solutions.

Is there anything like a no credit check debt consolidation loan?

All direct lenders have some form of credit check. It may not have to do with your FICO score or what you understand as a “traditional” credit check. More accurately, know there are always prerequisites for approval with every loan. The credit check could be as little as verifying some form of income.

In terms of more traditional credit checks, there are two types of note:

  • Hard credit check – Avoid these until absolutely necessary. A hard credit check lowers or “dings” your FICO score.
  • Soft credit check – Opt for a soft credit check whenever possible, especially in the preliminary phases of the application process. A soft credit check does not affect your existing FICO score.

Best no credit check debt consolidation loan alternatives

It’s worth repeating. All lenders have some form of credit check. Therefore, this type of loan does not technically exist.

Loans Amount Cost / APR ? Bad Credit Features
CashUSA
$500 - $10,000
Individual rates
Bad credit allowed
Allowed
  • Loan terms start at 3 months.
  • Next-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
QuickLoanLink (Personal loan) $300 - $35,000 APR:
Starting at 6.90% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 7 years
  • Credit check type: Soft ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 550
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
HonestLoans
$400 - $5,000
$30 - $750 ?
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
CreditLoan (Personal loan) $100 - $40,000 APR:
Starting at 5.34% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 7 years
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
GazelleLoans
$300 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
LifeLoans (Personal loan) $500 - $40,000 APR:
Starting at 5.99% ?
Bad credit allowed
Allowed
  • Loan term 2 months to 5 years
  • Credit check type: Both ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 580
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
OppLoans (Direct Lender)
(Personal loan)
$1,000 - $5,000 APR:
Starting at 99.00% ?
Bad credit allowed
Allowed
  • Loan term 9 months to 3 years
  • Next-day deposit: In some cases ?
  • Low approval rates ?
  • Time for decision: 1.5 min ?
RubikLoan
$100 - $1,000
$1,000 - $5,000
$15 - $300 ?
APR from 6.9% ?
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
Personal Loans (Personal loan) $500 - $35,000 APR:
Starting at 5.99% ?
Bad credit allowed
Allowed
  • Loan term 3 months to 6 years
  • Credit check type: Soft ?
  • Next-day deposit: In some cases ?
  • Min creditscore: 580
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
BadCredit.com
$100 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Next-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?
OpenCashAdvance
$200 - $5,000
Individual rates
Bad credit allowed
Allowed
  • Same-day deposit: In some cases ?
  • High approval rates ?
  • Time for decision: 1.5 min ?
  • Type of service ?

Low credit scores and nonexistent credit do pose serious obstacles in gaining approval for a loan. In case your credit score isn’t doing you any favors, here are a couple of alternatives to consider in place of a debt consolidation loan.

Debt management plan

A debt management plan helps you gain control of your finances without the presence of an actual loan. Many companies that offer debt management plans are non-profit organizations. They work by forming an agreement between you and your creditors.

Debt management plans are useful in:

  • Lowering your monthly payments
  • Allowing you to make one payment toward all of your debts to a single agency

For more about debt management plans, you can check out the National Foundation for Credit Counseling for assistance.

How does debt consolidation work?

Debt consolidation means aggregating or combining all of your debts into one payment. Auto, credit card, home equity, or other outstanding debts paid through the lender, act as a single monthly payment and interest rate. There are several methods to consolidate debt. Planning and seeking financial advice is much advised.

One example of debt consolidation is to open a new line of credit. Acquiring a new credit card and using the latest available balance to pay off all of your debts essentially transfers the balance of all your debt into one place. Now, everything you owe exists as a single credit card payment.

Credit card interest rates are not the best. If you can’t pay off all your debts in a month, then you may opt for a debt consolidation loan. These types of loans are done by a bank or through some form of lender.

They offer:

  • Lower monthly payments
  • Lower interest rates
  • A variable total life of the loan
  • One lender to pay for all of your debt

How can debt consolidation loans lower my interest rate?

Transfers, equity, and credit card promotions – Transferring balances to other credit cards, using home equity as collateral, or taking advantage of credit card temporary transfers are all methods of achieving lower interest rates. Debt consolidation loans lower your interest rates by shifting your balance to different institutions.

Different institutions offer different terms and varying interest rates.

Connectors shop interest rates for you – Apply to different lenders directly, or seek out a connector. Connectors remain the optimal choice. They work for you to find direct lenders that will lend to you. Once seen and approved, you will receive a quoted interest rate. If approved by multiple lenders, you can shop interest rates, thus lowering your current interest rate.

Extend the life of the loan – Another method by which debt consolidation loans lower interest rates is by extending the life of the loan. A 48-month loan compared to a 24-month loan will result in lower interest payments. The lender makes more money over the life of the loan, and you get more manageable payments.

Consolidate to raise your credit score – Consolidating your debts can help to raise your credit score. A higher credit score can earn you better interest rates. This works because allocating funds to pay off high-interest-rate debts first lowers your interest rates over time. Paying off high-interest-rate debts lowers your DTI (debt-to-income ratio). Credit agencies observe this, and a lower DTI makes for a higher credit score.

Requirements for debt consolidation loans

Some essential elements work across the board for most lenders. These apply to debt consolidation loans, as well as personal loans. Debt consolidation loans can have higher or lower interest rates than personal loans.

Here’s a short essential checklist:

  • The applicant must be 18 years old or older. Being at least 21 years old, means you are more likely to receive approval
  • One must be earning a monthly income of at least $800. The recommended pre-tax amount is $2,000
  • Maintain an active bank account
  • Provide an ID
  • Show proof of income, usually with a pay stub

Be sure to understand what you’re getting into. Before speaking to any lender or connector, be honest with yourself, consider realistic rates and time frames. Keep track of interest rates and fees, as well.

Declare bankruptcy

Declaring bankruptcy may not be as bad as it sounds. It’s not the same as being destitute, on the street, or ruining you financially for life. In fact, it often proves a good option if paying off your debt is entirely unrealistic.

There are two advantages or types of bankruptcy declarations to familiarize yourself with:

Joseph Smith

Joseph Smith
Writer and editor

Joseph Smith is an experienced freelance writer with over 11 years of experience. His area of expertise includes finance, loans and lending. His work has been featured on various large websites including this one.
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