With the hard work being done by the
military both at home and abroad, it is somewhat apt that they should be able
to source loans without the added stress of going through a credit check. The
availability of no credit check loans to members of the military effectively
means that a loan is at their finger tips, but there are still financial
aspects that need to be kept in mind.
The idea of loans that require no
credit checks is not completely exclusive to the military or government
services sector. In fact, they are available to the ordinary consumer too.
The simple fact is that loans free
of credit checks are only available because the borrower can make repayments
directly through their salary check, removing the risk of the borrower failing
to pay.
Loan Type Explained
Quite simply, a no credit check loan
is a loan that requires no check to be made on the credit history of the
applicant. It seems a bit strange that a bank or lending institution would be
willing to provide a loan blind. However, this is not necessarily the case.
A lender has little interest in the
type of person a loan applicant is. All that matters to them is that the
repayment schedule is kept to, and their money is paid back. That is why this
kind of loan tend to be available to those with guaranteed employment, with
military personnel a perfect example.
Because military means government,
the applicant is unlikely to lose their jobs. This makes receipt of the monthly
repayments a practical certainty. With such confidence, lenders can easily
afford to offer loans free of credit checks.
Risks for the Borrower
Of course, nothing in this world is
for free, and a no credit check loan is still a loan that needs to be repaid.
To that extent, there is a responsibility to repay and a chance, though much
reduced, of default. Thinking that check free loans means free money is a big
mistake.
For this reason, it is essential
that anyone considering getting such loans understand exactly what they are.
First of all, loans that require no credit checks are always small, perhaps
extending to around $2,000. Secondly, the loan itself is expected to be repaid
in as short a period of time as just 90 days.
In fact, loans free of credit checks
are in essence payday loans, with repayments taken from pay checks each month.
While payday loans are usually repaid in full in one go, these loans can be
paid back over two, three or even four pay checks. With such a short term for
repayment, and such a low sum, these loans are designed for emergency financial
situations.
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