To look at the disadvantages of cash loans that come without a credit check, we have to first look at what exactly people are getting here and why.
Credit checks are not usually a problem
For the majority of people a credit check is not a major issue. These checks are designed to pick up those people that historically have struggled, or are currently struggling, with their debts. If you have failed to pay off loans or are feeling the pinch at the moment and are borrowing heavily from different sources you might have found that getting access to a loan that requires a credit check is impossible.
So you then look at those cash loans on the market that come without a check of your credit rating. After all, as we shall see there are disadvantages to these loans that mean that anyone who could pass a basic credit check would no doubt rather go elsewhere for their money.
Who wants these loans?
If the situation is that if you can pass a credit check you go there for your cash else you go for a loan without a check, that shows that the companies that are issuing these loans are going to be dealing with at least a lot of the time (if not all of the time) those people who really cannot afford or can't manage the loan.
If that is the case, then the big lenders don't want to touch them. So what is in it for the lenders that do specialise in these no check loans?
First, the lender might limit the amount of money that you can borrow for them. This is a big disadvantage in that you might not be able to access enough cash, but it means that their risk exposure to you is limited.
Higher pay backs
The second trick they use is higher interest rates. Right from the start you can be paying back more in interest (and possibly set up fees), so that they recover their investment quickly. And if you are one of those that does go on to pay off the full loan then you are paying back a lot more than you might have paid back if you had gone to a lender who did run credit checks.
So the disadvantages of these loans is that there is not as much credit available and it is far more expensive.