Banks are financial institutions that offer financing facilities for responsible customers with good credit points. Individuals who wish to borrow from a bank or lender go through several processes to verify that they meet financial standards.
If an applicant applies for a mortgage loan but does not have the necessary financial health in their documents, they are denied the application because they have no way to prove they can repay the loan. If you have difficulty documenting income, you may be interested to know what banks offer no-doc loans.
What is a no docs option?
“No doc” means “no documents” and refers to a loan made without verifying the applicant’s income. This credit is approved with a statement where the recipient assures that they can pay the monthly installments in the agreed terms.
Non-doc loan lenders are mainly granted to those who do not have easily verifiable income or have an irregular salary acquisition. These loans are not based on the purchasing power of the applicant but the amount they can receive from the resale of the collateral property and the form of payment on which the mortgage is agreed.
Note that these undocumented mortgages have higher down payments and interest rates than conventional loans.
What are the easiest banks to get a loan from?
The easiest banks where you can get a no-doc loan lender are USAA and Wells Fargo. The former does not state the minimum credit score on their website, but they confirm that they consider people with scores below the acceptable credit range, i.e., below 640. That means that people with bad scores are eligible.
Wells Fargo accepts people with 660 points for the loan. But you can also consider that it has secured personal loans in exchange for lower credit scores. This financing is paid monthly to a Wells Fargo savings account or CD.
Most banks access loans with credit scores of 660, although you can find some with higher point requests, such as Citizens Bank with 680 or Barclays with 700.
If you know what banks do no doc loans, check out this list:
- USAA lends to people with 640 credit points
- Wells Fargo accepts minimum scores of 660 for unsecured loans
- American Express also allows loans with 660 credit points
- Discover access to financing with 660 points
- TD Bank has credit for customers with 660 points and non-customers with 750 points
The average point in the U.S. is 660, which means that almost everyone is qualified to apply for these loans. The financial institutions listed above lend without a guarantor more quickly, but you also have access to these banks with more complex processes.
If you want to explore outside these banks, you can look for Bank Of America no doc loans. Remember that some credit unions and online lenders have better deals with bad credit. For example, Avant’s credit requirement is 600 points, and LendingPoint’s is 585.
How do I know if I qualify for an unsecured personal loan?
Banks know that granting unsecured loans; therefore, the acceptance of your application depends on other factors. Financial institutions with traditional credit would look at your income, but in these cases, they look at your credit history, creditworthiness, and CIBL score.
If the banks consider that your statistics on these points are okay, they request identification and residency documents to approve the credit. If you think you are eligible, you must meet these requirements:
Have good credit
Banks and lenders offer better interest rates to those with good credit, more than 689 points. You can also receive financing if you have bad credit, but you must consider that you will pay high-interest rates.
Not having debts
Ideally, you should have no debt or a low debt-to-income ratio. The standard is to have a DTI of 40% or lower to be eligible.
Stable credit history
Applicants who can demonstrate a stable credit history are among the candidates. That means you have paid your credit on time on all your accounts, such as credit cards, car loans, or long-term loans. Two to three years of stable credit history is recommended.
How can I borrow without collateral?
If you have the pre-established conditions to apply for a personal loan without collateral, follow these three steps:
- Prequalify: Go through a screening process until you choose the best personal loan. The easiest way is to prequalify with multiple banks or lenders; this way, you can see your loan amount and fee without affecting your credit points. Consider that not all loans offer prequalification
- Apply: After choosing the bank or lender with the best offer, you must apply for the loan. Most can be used online by filling out a form with personal information, identification, address, contact, and Social Security number
- Receive the loan: After approval, you will receive the amount established in the contract. Depending on the loan chosen, you may receive the money the same day or the next day after approval
Alternatives to unsecured personal loans
These loans become almost imminent for those who do not have monthly income or are easy to demonstrate. But in some cases, applicants take other paths because the interest rates and monthly payments are usually higher than traditional financing. In the following lines, we list some alternatives to unsecured loans:
0% APR credit cards
Some banks offer zero percent interest loan cards, ideal for paying off a wedding, medical bills, or closing a debt. It would be best if you had good credit to be eligible and a small debt covered by an interest-free promotional period on the credit card. These payment periods typically last up to 21 months.
Home Equity and Heloc Loans
You may qualify if you are willing to use your home as collateral and have the money. These home equity loans can give you more time to pay and lower rates than a traditional personal loan.