Personal Student Loans with No Credit Check: What is the Catch?

Have you ever heard of Personal Student Loans with no Credit Check? If I say such a loan exists, all you students have a bad credit history would be jumping up and down at the prospect of availing these loans. In essence, when you know the answer you could well be disappointed. The reason I say this is because I know the process for application and approval for such loans. I guess it is time that you know the realty behind these loans.

What is the realty on Personal Student Loans with no credit check?

In realty, any loan application would need to be scrutinized by the financial institution providing the loan. The loan application would need to be checked against the credit records of the applicant. Only if the applicant or the co-signer of the applicant has a good credit score will the loan application be approved.

In such a scenario, the only other eventuality where you would get personal student loans with no credit check is when you consolidate your loans. There is a caveat attached to this case as well. Let us understand the concept with an example.

Let us assume you have taken loans from Bank A, Bank B and Bank C. You can apply for consolidation of these loans only when you have a repayment record. Most financial institutions would insist on you having a good repayment record for at least 6 months. When you apply for a consolidation of these loans with Bank C, they would take into count your repayment history on the loans provided by them. If all the repayment records are good, you can consider that your personal student loans would be passed without a credit check. That said, the decision to do a credit check on every personal student loan is on the discretion of the bank.

What is a Payday loan?

Payday loan is another type of loan that is approved without your credit being checked. Most financial institutions offer this loan to individuals who are in dire need of money. Approved up to the amount of $1500 per application, the loan amount is directly applied to your savings account. Essentially, this loan is also known as Cash Advance Loan and has its own set of requirements to be complied with.