Borrower’s Guide to Practical No Credit Check Long Term Loans

alc no credit check long term loan

There are so many reasons why people need to take out a loan. And, it’s not hard to understand why people are opting for no credit check long-term loans. Entrepreneurs with bad credit or no credit need capital to fund their startup, especially during its growth or expansion stage. Small businesses need working capital, and when their own savings or assets are not enough, they need financing help to overcome cash flow problems to continue its business operations.

While others want to repay their borrowed money as soon as they can, some people need to extend the loan term to lower the monthly payment; and to allow them to buy a more expensive house, car, equipment or any other item with a low monthly payment. Some people need long-term loans to purchase a house (mortgage or refinance) while others use it to fund big-ticket events such as wedding, divorce and children’s education.

Short-term versus long-term no credit check long term loans

Interest rates

Let’s establish the fact that many applicants in no-credit-check loans have no credit history or that they have poor credit. Before you decide which type of loan best meets your needs, take a look at the following scenario.

A wants to borrow $2000 to fund his daughter’s wedding. Based on his income, the loan can be repaid in 3 months. Since A has established a good relationship with his local bank by maintaining his checking account, paying back his old loans on time he was offered a short-term interest rate of 7% for a 3-month loan. However, when he opted for a long-term loan, he was charged with an 8% long-term interest rate. You might ask, “why the difference in the interest rates?” The market fluctuates from time to time. Lenders are concerned with interest rate fluctuations in long-time loans. If A will opt for a short-term rate, he will have to pay an interest rate which is at least one per cent lower than the longer-term loan.

Risk for the borrower

Short-term loan poses more risk for the borrower, and not on the lender. Supposing Businessman B obtained a $1000 short-term loan he needs to pay in 30 days. But, the cost of the production actually exceeded $1000. Since he has to repay the loan in the next 4 weeks, he has two problems to solve–the repayment of the loan and the additional cost of production. So, what will he do? He may apply for another loan which is far costlier than the first loan, or he may have to opt for cost-cutting just to have enough cash to repay the loan. Instead of getting a low-interest long-term, loan, he may have to resort to the high-interest short-term loan before his next payment on his original short-term loan falls due.

Secured and unsecured no credit check long term loans

Secured loans have lower interest rates than unsecured debts simply because there is a lesser risk to the lender because of the collateral security. On the other hand, unsecured loans usually carry a higher rate of interest because it is riskier for the lenders, simply because they cannot confiscate any of your assets in case you fall behind in your monthly repayments. But, it is perhaps safer on your part because all you need to worry about is the collection notice or increased charges and interests for late payment. Plus, your property will remain intact.

Getting no credit check long term loans with bad credit can be difficult but the Australian Lending Centre can help you get the money you need. Enquire now and get a quick evaluation of your borrowing ability.

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