A credit score gives lenders an idea of how likely borrowers are to pay back their loan, but it's only one of the factors lenders look at when making lending decisions. Although it may be tough to find personal loans with no credit check, borrowers can still get personal loans with fair or poor credit. Below are other factors lenders might consider and some options for borrowers with poor credit.

Factors Lenders Consider Besides Credit

Lenders want to be reasonably sure their borrowers can pay back the loan. Here are some factors they may consider in addition to a borrower's credit score when deciding whether to approve them for a personal loan: 

Debt-to-Income Ratio

One of the main factors that lenders consider besides credit is debt-to-income. If someone's credit is low, but they earn a high income and don't have a lot of debt, this shows lenders that they can likely afford monthly loan payments.

Employment

Lenders also look at the borrower's employment status. A history of steady work shows them the borrower will have the income necessary to make the scheduled payments.

Collateral

Lenders also offer secured personal loans, or loans that use an asset the borrower owns as collateral. Collateral is simply an asset like a car or house that the lender can use to cover the remaining loan if the borrower defaults. Since collateral secures the loan, lenders offering these types of loans are often willing to look past a low credit score.

Personal Loans for Borrowers with Poor Credit

Here are some personal loan options for borrowers with poor credit:

Cash Advances

Cash advances are short-term, small-dollar loans that the borrower will pay back when they get their paycheck, usually within 2 to 4 weeks. These loans are designed to help borrowers get some extra cash to cover expenses before their next payday. 

Many cash advance lenders have more lenient credit score requirements and will consider other factors, like whether the borrower has a steady paycheck. Better yet, they tend to fund these loans in as little as a day.

Title Loans

Borrowers that own their vehicles free and clear can leverage them for short-term loans called title loans. These secured loans use the borrower's car title as collateral.

Title lenders appraise the value of the borrower's car, then offer 25 to 50% of the car's value as a loan. If the borrower accepts, they can get the loan and can continue driving the vehicle while paying it back.

Personal Lines of Credit

Borrowers with poor credit can also consider a personal line of credit. A line of credit is a flexible loan that lets borrowers withdraw as much money as they need up to their set credit limit. Borrowers will only pay interest on the amount they borrow and can pay back the loan all at once or over time.

Many lenders offering personal lines of credit don't require a great credit score and will approve borrowers with poor and fair credit.

Getting Loans with Poor Credit

Borrowers with poor credit aren't out of luck — quite the contrary. Many personal lenders look at income, debts, employment, and collateral in addition to their credit score when making lending decisions. Whether borrowers want a cash advance, title loan, or line of credit, there are many lenders out there that don't require good credit for approval.

Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.

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