Should I Recommend no Credit Check Loans?

Should I Recommend no Credit Check Loans?

If you have dependents, friends or other family members that often ask you for financial advice then you may sometimes wonder whether you should recommend no credit check loans to them. Recommending borrowing can sometimes be difficult anyway and recommending this sort of loan might make you feel uncomfortable. There are some things though, that you can ask yourself before giving advice which might help you with your decision.

  • Can they afford the repayments? – it is worth thinking first about the repayments on the no credit check loan. These will differ depending on which type of loan they are thinking of using. It is good to have a think about this yourself and then to have a discussion with them about it as well. If you feel that they cannot afford any repayments then it could be best to talk them out of having a loan at all. However, if they can afford some then it will be a case of making sure that they are confident that they will have the required amount to pay the loan. It is also important to think about all of the other things that have to be paid for as well and whether those are affordable on top of the repayments. 
  • Are they prepared to pay the costs? – it is always wise to work out what the actual cost of the loan will be. If you let them know how much it costs then they will be able to decide whether they are happy to pay that extra money or whether they feel that it will not be worth it. The amount will vary depending on how much they want to borrow and how long for but if you can work it out then it will be easier for them to be able to make up their mind.
  • Is it an emergency? – many no credit check loans are set up to help people cope in an emergency. The money can be handed over quickly but it will also have to be repaid quickly. It is worth thinking about your friend’s situation and whether it is an emergency. If they can wait for the money, then that might be the sensible thing to do as this will be less costly than borrowing.  However, they may need the money really quickly and so may just not have the option of waiting for any longer.
  • Do they have other options? – it is also wise to think about any other options they might have. It is always sensible to compare options and think about the pros and cons of each so that you are able to work out which of them will be the best one. They may have other options that are not as good, they may have no other options at all or they may have plenty of other options which also need thinking about. It is wise to keep options open and to consider all possibilities. It might be that they have some savings that they could use, for example. They might be able to reduce their spending so that they can afford what they need or they may be able to earn some more money. They could be other options for them as well and it is best to get them thinking about those options before they decide whether a loan is the best option for them.

It can be hard if a friend asks you whether you recommend something. If you have had personal experience of using it, then you will be able to tell them about that. However, if you do not then you will only be able to tell them what you know form your limited experience. It can be good to make sure that they know everything about the type of loan that they are considering and then they will be able to work it out for themselves. Do remind them to think hard about whether they think they will be able to manage the repayments and also to think about whether they think the loan will offer good value for money. Help them to calculate how much it will cost and then discuss with them whether they think that it will be worth it, if they consider what they will get out of it. It can be better to get them to do the reasoning rather than you, then they will be able to make the decision for themselves. It can be easy to be tempted to tell them what to do, but they are more likely to want to go with their own instincts and so you will need to guide their thinking so that they consider everything and then they will be able to make up their own mind as to whether they feel that the loan will be a good idea.

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