Micro Loan No Credit Check

Occasionally, we all need a little bit of extra money. A micro loan can be a great way to get it.

Unfortunately, bad or insufficient credit can significantly ruin your chances of getting a micro loan. So, if that’s the situation you’re currently in, what should you do?

Well, the best-case scenario would be to skip the credit check. But is there such a thing as a micro loan with no credit check? Well, let’s take a look. 

What this article covers:

Can You Get a No Credit Check Micro Loan?

As unbelievable as it sounds, yes: it’s possible to take out a micro loan without a credit check. 

Now, you have to understand that “no credit check” doesn’t always mean that the lenders won’t run a credit check on you. Responsible lenders will still run a credit check, especially if you’re a first-time client. 

micro loan no credit check

However, they’ll look past your credit score and check your financial situation instead. 

They’ll assess if your current income and expenses are balanced enough to allow paying for a loan. If they are, you’ll be approved for the loan, even if your credit history is terrible. 

As such, they are a lifesaver for clients needing small loans with bad credit. Not only that, but they’re also great for clients with insufficient credit history. 

How Much Can You Borrow With a No Credit Check Micro Loan?

As the name suggests, micro loans are small loans. 

You can borrow as little as a $100 loan. However, the maximum loan amount will vary depending on your lender. 

For instance, some lenders may allow you to borrow up to $5000, while some will cap it at $2000. A few will lend you up to $50,000.

Still, micro loans that don’t require a credit check usually won’t exceed the $5000 threshold. No lender in their right mind would risk a large amount of money on a bad-credit client—not unless you can offer security in the form of collateral. 

online check loan

Eligibility Criteria for an Online Check Loan

Eligibility requirements for small cash loans in Australia are generally the same.

You need to:

  • Be over 18 years of age
  • Be an Australian citizen or a permanent resident of Australia
  • Have an active bank account, email, and phone number
  • Have earned a regular income for at least the past three months 

Remember that some lenders will flat-out refuse clients with bad credit scores. Others will reject those on Centrelink benefits. 

To spare yourself the trouble, make sure to read the eligibility criteria of your lender and only apply if you’ve matched the listed specifications.  

Cost of a Micro Loan

The cost of your loan will depend on how much you’ll borrow. 

According to the Australian Securities & Investments Commission (ASIC), loans up to $2000 can’t have interest rates. They can only have fees on a fixed maximum. 

So, when you borrow $2000 or less, a lender can charge you a 20% establishment fee and a 4% monthly fee at most.

So, if you are borrowing a $1000 loan to be repaid in two months, you’ll end up paying the following:

  • Establishment fee: $200
  • Monthly fees: $80 ($40 x2)
  • Total: $1280
  • Payment on a fortnightly basis: $256 (x5)

micro loan no credit check australia

This is the best-case scenario, where you’ll repay the debt on time every month. However, if you can’t pay on time, expect the lender to charge late payments, which can reach $7 per day. 

As for loans over $2000, you’ll now have to pay interest. Generally, it’s capped at 48% p.a. of the principal, but note that you’ll also need to pay an establishment fee. It typically amounts to $400, but some lenders can raise it up to $700. 

Note: It goes without saying that the longer the payment goes unpaid, the more your debt grows due to late payment fees. So, choose a loan term that allows you to stay on top of things. 

Can a Micro Loan Affect Your Credit Score?

Well, yes. It can make it better or worse, depending on your actions.

For instance, applying for multiple loans in a short period will worsen your credit score. However, if you repay them all, your credit score will rise.

So, never make light of a single micro loan and remember to always make your payments on time. 

online check loan australia

How to Make Your Micro Loan Application More Appealing 

One of the main pros of these loans is that their approval rate is high. However, not every applicant will be accepted. This can be for a variety of reasons—some you can’t control, and some you can manage. So, here are a few things you can work on to improve your chances of getting accepted. 

Offering Collateral

They are unsecured; hence, they do not require collateral. However, having valuable personal property can set your lender’s mind at ease. 

As such, he may be willing to overlook your bad credit or offer you lower fees. He may even offer you more money than you thought possible. 

So, if you’ve got any valuable asset to your name, mention it.

Showing Promise 

Typically, micro loans are offered to aspiring entrepreneurs and start-up businesses. So, when lenders come to loan you money, they’d like to know how you’ll be using it. The more details you can give them, the better. That way, they know their money isn’t going down the drain. 

So, make a business plan and tell your lender your financial projections. Once they have proof you know what you’re doing, they’ll be much more inclined to give you the money. 

Sorting Out Your Credit

Occasionally, there may be mistakes in your credit history, causing your score to go down. As such, you must check your credit report before applying for a loan. That way, you’ll have the chance to correct any errors that may come up in it and save yourself some trouble.

no credit check micro loan

Conclusion

Micro loans with no credit checks are a great option for individuals with bad or insufficient credit history. With such loans, lenders won’t focus on your credit score and will instead focus on your financial situation and future promise. 

So, ensure you have everything in order before applying for the loan. And remember to be realistic. A micro loan won’t get you ridiculous amounts of money, but you’ll have just enough to help you stand on your feet.

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