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No Credit Check Loans for Military Members: A List of Pros and Cons

February 12, 2012 | Comments: 0 | Views: 133

As you are probably aware, there are many options available on today's lending market if you are looking for funds. Both unsecured and secured loans are offered for various reasons, and each type of loan takes a different amount of time to receive. Large home loans, for example, need several months for approval, whereas smaller, personal loans are generally given inside of a few days. As a member of the military, with a lot on your plate, waiting a long time for loans to process may not be a very good option. In these cases, loans with no credit check often offer the best alternative.

For members of the military, no credit check loans are easy to secure and often can lead to fast financial relief in times of need. There are many pros and cons to this lending option.

Why Do Loans Take So Long?

When people hear that members of the military can receive a loan with no credit check within 24 hours, their first response is - how is this possible? However, the key to understanding the time it takes to qualify for a loan is found in first understanding what makes loan processing take so long in the first place. And the answer is simple: credit checks.

For the members of the military, no credit check loans are available by virtue of their job stability. Military pay is guaranteed, so loans are given based on ability for repayment rather than past history, which is what a credit check reveals.

Pros of No Credit Check Loans

As I mentioned above, the security of military jobs makes getting a loan with no credit check so much easier than for civilians in similar situations. Since the federal government is responsible for your payment and getting "laid off" is impossible, your guaranteed income shows lenders that you are a good bet for a loan.

Therefore, as long as you can prove your active military status and can provide the lender with a bank account for depositing the loan, your approval is guaranteed. In addition, the money that you get is generally available within 24 hours of your loans application, eliminating the extraordinary waiting periods associated with other loans.

Cons of No Credit Check Loans

For all the good that no credit check loans offer military members, there is also some bad. This is because the nature of these loans leads to two issues: low principle amounts and short payback periods.

The purpose of this loan is to provide cash to the borrower on the short term. Long-term employment and other viability is not an issue because the amount of the loan is repaid in 14-60 days. To coincide with this short repayment period, the maximum amount of money offered is usually $1,500 at most.

One final factor to consider as a military member utilizing a no credit check loan is the rate of interest that these loans charge. Again, due to the short repayment term, interest rates are quite a bit higher than national averages for long-term personal loans. Therefore, this is an option that should only be used when absolutely necessary.

Making Your Choice

As a member of the military, no credit check loans will prove particularly appealing in certain cases of financial struggle since they are a guaranteed pipe line to fast cash. However, there are clear pros and cons to this lending option, which makes it essential that you take some time when making a decision.

Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loan and Student Loans with Bad Credit. For more information about his services please visit him at AccessMyLoan.com

Source: EzineArticles
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