There is a tendency to believe that when applying for a loan, the need to have a good credit scores is essential. This may have been true in the past, but modern lending firms no longer place such an insistence on scores. This is partly the reason for the growth in popularity of no credit check loans.With these kinds of loans, there are clear advantages for both lenders and borrowers but it is important to note that no check does not mean a guaranteed application approval. However, it does mean that the process of seeking funding is made a little less stressful.And as long as the other criteria are suitably addressed, the chances of securing much needed finances are improved. Still, as with all personal loans, there are some factors that need to be carefully considered.Why Checks Are Not NecessaryIt might seem that checks should be standard for all loans, but no credit check loans are a break away from such traditional criteria. With low credit scores often an inaccurate indication of risk, the more forward thinking lenders can do away with the practice of checking scores.In fact, with so many people having suffered bad financial luck in recent years, many of the most trustworthy borrowers have seen their scores plummet, leaving them amongst those once believed to be high risk. The result is that lenders now pay little attention to such things. And while guaranteed application approval does not really exist, it does help considerably for those with bad credit histories.However, it is worth noting that, as with all types of personal loans, the lender will increase the interest rate to cover the perceived risk.How They Improve Your LotThe popularity of no credit check loans amongst lenders is easy to understand. In terms of PR value, it is huge, and as a way to actually increase interest rates, it means that profits can easily improve. While there are some borrowers that default, the positives do outweigh the negatives by quite a distance.Its popularity amongst borrowers is also easily understood. For so many, the reality is that loan applications are stressful, and the time taken in coming to a decision can leave the applicant chewing their nails. Leaving credit checks out is not a form of guaranteed application approval, but it does make the whole process much less likely to cause stress.In this alone, most applicants are pleased since the reasons for rejection are reduced. After all, it is commonly thought that a bad credit score is a reason for lenders turning down a personal loan application.Consider Providing CollateralLenders are no fools, so what deals they might offer are made only if there is a way to profit from them. With no credit check loans, lenders look for other ways to lessen the risk. The most effective way is to provide security with a loan application.With loans of perhaps $1,000, security might not be deemed necessary, but it is important when the loan being sought is quite large. The use of some item as collateral that matches the value of the loan can all but guarantee application approval. This is because the lender is provided with a source of compensation should the borrower default on the loan.Having an item worth $25,000 or $30,000 can be more difficult, but including a cosigner can solve that predicament. Cosigners are effectively guarantors who promise to make monthly repayments should the borrower be unable to. This means that personal loans of large sums can be comfortable covered.