The Do’s and Don’ts of No Credit Check Loans

Before we go through the list of do and don’t on no credit check loans, let’s understand what is no credit check loans compared to the traditional loans that we get from the banks and the independent lenders.

 So what is no credit check loans?

As the name speaks to itself, to offer loans, the lender will not check any credit history of the individual and disperse the cash based on the requirement with a high-interest rate which should be paid back in a short duration of time.

Usually, this type of loan can be availed by individuals who have bad credit history profile. They are a lot of lenders or financial institutions who offer no credit check loans, so it is important to understand that you get to know all the terms and conditions before getting on:

Loans are never considered bad for your financial until and unless we have a focus and understand our core needs are:

  1. Do compare with other lenders: Most of the time when the lenders sanction the amount, they don’t take time to explain all the terms and conditions. So it is your responsibility to understand all the legal terms, like repayment structure, interest rate, any prepayment penalties etc. It is definitely a good aspect to look into while going for loans.
  2. Do opt loans for Good debt: Using loans for your educational purposes or buying a home where you can afford to pay your monthly bills is a good aspect. Go out for loans when there is an absolute need only.
  3. Do set Automatic debits from your bank accounts: This option is suitable for individuals where they have study income flow on monthly basis. This will help you pay off your monthly loan repayment amount on time. Thus also reduces the surge of overspending.
  4. Do seek help: If you are in a situation where you want to close the loan or understand how to extend the tenure, it is always good to check with the lender and try to sort out the problem rather than missing the monthly payments. Overall it will mess up your credit score.

They are few things that you should not do at all when it comes to Loans:

  1. Don’t be late in terms of payments. If you are irregular with your monthly loan installments then it shows off your carelessness. It will mess up your credit score and also increases your burden of repayment as the interest goes up.
  2. Don’t utilize loans for your personal benefits: Well it is fancy to get a new iPhone or a fancy vacation, using your loans to fulfill your needs will only end up paying interest amounts for several years, which is not at all good. It is a good option to save for your new gadget or for your vacation and then plan.
  3. Never utilize any credit check loans until and unless there is an urge for it. If you start using these type of loans to fulfill your needs then you end up paying a huge amount of interest rates for several years and finally goes into bankruptcy.

Understanding the difference between home equity loan and second mortgage.

Everyone has a dream to get their own house at some point or the other in their lifespan. Getting yourself a house is not an easy task and if you are not prepared with a budget then they are few options which one can consider, they are home equity loan and a second mortgage. Well, both are loans that can be used, but it is vital to understand the difference between both types of loans because they have differences in the interest rates, the repayment structure is different etc.

So what is a second Mortgage?

The second mortgage is nothing but another form of loan where you will get a lump sum amount as per your first mortgage. This loan can be available after your first mortgage and usually, the closing rates are considered to be very low compared to that of the first loan. The interest rates and the repayment structure for your second mortgage will be the same process.

Usually, this type of loan is offered and can be utilized for the following activities:

  • Home improvement project
  • Restructuring your debt
  • Need for personal use

The loan process is simple and the success rate is actually a lot higher because your profile has already been audited before giving out your first loan. The key to getting a second mortgage loan is that the individual should have a valid income proof and also a good history of clearing the loans. This will help to expedite the process.

So what is Home Equity Loan is all about?

 Home Equity loans are commonly addressed as HELOC, i.e. Home equity line of credit.  It is a line of credit which can be used in different ways, like:

  • Paying off for your children tuition-free
  • Home improving projects

Most of the time people tend to use HELOC as a secondary mortgage and creates a confusion while opting the loan. It is always advised to make sure and go through the fine prints or the documentation offered by the bank to understand whether it is a second mortgage or a true line of credit.

It is like a credit card where you will have a certain limit to it in terms of spending and the repayments can be done based on how much amount of money has been utilized. The limit is actually determined by your qualification and also property evaluation.

So what is the difference and which one is better?

Both of the loan types can help you accomplish your goals and also reduce your debt.  Also, second mortgages are usually tax deductibles. So while opting any of the loans, i.e. Second Mortgage or home equity loan, make sure that you don’t deplete all of your home equity.

Also, the sum of both the loans cannot be more than 90 to 95 percent of the home value. This will help you to have some cash for yourself when you decide to sell your house.  Please read through all the documents pertaining to the loans and consult your lender before opting any of the loans.

Points to Note about Short Term Business Loan

It doesn’t matter if you are dealing with an unexpected upsurge in cost or temporary emergency during your business, you might need to start looking for some funds to get over this situation. You might also want to get over unwanted operational costs, bridge the temporary cash-flow gaps, as well as deal with urgent repair or avail some new opportunities. Every small or big thing demands funds. Under such circumstances, a big respite might be offered by short term business loans. In Australia, the lenders have simplified the task to such an extent that one can now avail the required help within 24 hours.

So, now let’s understand how short-term business loan works. Short-term business loans usually range somewhere between $5000 – $25000 and the terms range somewhere between 3-12 months. The repayment routine may vary from one lender to another, some expect daily repays while there are some that are satisfied with monthly or weekly repayments. But it is an easy way out since there are a number of lenders that approve as well as fund short-term loans within a day.

There are many who feel confused about availing such helps. Though there are no predefined rules but availing one such help gets mandatory under some specific situations. This kind of help can be very crucial in many cases like when you need to overcome some temporary operational cost. For instance, your firm might be needing some new hardware to meet an upcoming deadline but you might be lacking funds for this new purchase. A short term loan can really be quite beneficial in one such case. If you feel worried about repayment, then know that you might be paying back on a weekly basis which means you will have time to cover your cash-flow gaps. But if it is a daily payment system, you may need a regular source of cash-flow.  If you fail to meet those deadlines, it may lead to penalties and fines. Usually, short-term loans are suitable for those businesses that include high numbers of everyday transactions. Lumpy turnovers or longer down period’s means you cannot afford to take a short term business loan.

The reason why short term loans are preferred by so many is because of the ease and speed of process. It also allow businessmen to take complete advantage of new business opportunities. However, with that, you cannot forget about high rates and fees involved in the process. The weekly or daily repayment schedule can be stressful so make sure you have the backup. There are a few serious considerations that you may want to give before applying for any such loan. The important factors include turnaround time, loan cost, business eligibility, cash flow projections, as well as business eligibility.

How to avoid cash flow crunch

Cash is considered as oxygen for the business, everything that we deal with in our day to day business activities is calculated in terms of money. The number of hours the employees worked, it is termed with the compensation per hour for an individual, and the same thing applies to the rest of the business activities.

So what if you were in a situation where you start feeling the heat and end up in cash flow crunch. Well, here are few tips that will save you from getting into cash flow crunch:

  1. Forecast your cash flow:

It is a good idea to understand cash flow for the next 6 to 12 months, with the help of cash flow forecast process. It will help you track all the finances that you need and also the potential pitfalls. Well, it is not a rocket size, just start off simple with an excel where you keep a track of your income and costs details on monthly basis.


  1. Make sure your payments are up to date:

To have a smooth flow of cash, it is always a good idea to pay out all of your payments promptly, so that no additional interest amount is paid towards that installment. The leftover amount will be useful to manage the rest of the activities.


  1. Access credit:

If your family is growing or your business needs extra cash then it is definitely a good idea to have extra credit offered by the bank or the financer. This will help you instantly act according to the situation rather than just looking out for the income source. Especially, if you have a new client on board and to meet the sudden urge of the demand, a line of credit is definitely needed. Also, one has to be very careful while using these services. If the line of credit is used for an unnecessary activity then it will add up to your financial burden.


  1. Start saving and control your outgoings:

I know this is going to be difficult, but implementing this strictly you will be ending up saving an extra pile of cash that can be used for emergency situations. If you keep track of your spendings on daily basis it will help you to cut off any unnecessary purchases. Gradually controlling this urge will save you few dollars. This extra pile of cash will help you when you are really in need of it. This is slow and study process, but definitely, you will end up saving something for yourself.


  1. Anticipate future problems:

We all know that businesses are not a steady always, you can definitely expect a sudden surge or a fall. So be prepared for this kind of situations is needed. This type of thought will help you run your daily chorus without any issues and hassles. By keeping you with study cash flow even through the tough times will not financially bother you much. If you are not sure about this then approach your financial advisors or accountants for possible options.