There are many advertisements you will see about no credit check personal loans. These are well known inside the United States and are offered across the UK as well. These loans can be tempting - a no credit check secured loan meaning that no one will even look at your credit and if you can show that you will make the payments (based on your job history) you will be approved.
But are these no credit check personal loans a scam?
The answer to this question is complicated. In essence, a no credit check personal loan is not a scam. It is a strategic decision that some lending companies make in order to find more people to offer loans to so that can get a profit. That said, there are two things to look at:
1) These loans have very high interest rates and additional fees.
2) A not-too-small percentage of the lending industry that offers these loans are scammers, in that they try to take advantage of people that need a loan so badly that they are willing to take a high interest personal loan just to get one.
In the first instance, having high interest rates and additional fees does not make a lending company a "scam" but the amount that the lending company profits means that it may as well be. Paying interest rates that are equal to or greater than the APR of your poor credit score credit cards means that the lending companies are raking in profits. In addition, they can offer fees that you would normally not receive from another loan company.
In the second instance, the companies not only have ridiculous interest rates and fees, but additional fees for a variety of different things that allow them to collect off your misfortune. These companies are not quite as common, but they can look like any other lending agency because their contracts are essentially the same.
To summarize, no, no credit check personal loans are not exactly a scam, but they are such high interest loans and they can have large fees, so they may as well be scams. And personal loans, though they are as versatile as things like secured loans, are usually needed so urgently that many companies try to rope in people that are in desperate financial need.
In general, if you can find a better option for your lending needs, you should probably do so that way you will not risk getting roped into a high interest rate loan. But when there are no other options, a no credit loan is an option, and not all of the companies you look at are going to be scamming you.