Getting almost any loan without a credit history can be a challenge, according to the Consumer Financial Protection Bureau (CFPB). You may have some options, though. Learn more about how you may get a personal loan without an established credit history. Plus, learn about alternative ways to borrow money when a personal loan isnât an option.
Getting a loan when you have no credit history can seem daunting. Many lenders view applicants with no credit as high-risk, so they are hesitant to approve them. However, just because you don’t have an established credit profile doesn’t mean you can’t qualify for financing. Here’s what you need to know about getting a loan with no credit.
What Does It Mean to Have No Credit?
There is no credit history if you don’t have any. This means that Experian, Equifax, and TransUnion don’t know how you’ve handled credit in the past. For some people, this is known as “credit invisible” or having an “insufficient credit file.” “.
You may have no credit history for various reasons:
- You’ve never had a credit card or taken out a loan.
- You have credit accounts but haven’t used them recently.
- You’ve only had credit accounts open for a short time.
- Your credit activity isn’t being reported to bureaus.
No credit history doesn’t necessarily mean you’ll be denied financing. But it does limit your options compared to applicants with established credit.
Loan Options for Borrowers With No Credit
You might not be able to get a regular unsecured personal loan if you have bad credit, but you still have options:
Secured Personal Loans
With a secured loan, you put up collateral like your car or home. This gives the lender security if you can’t repay.
Pros: Higher approval odds, can borrow larger amounts
Cons: Risk losing collateral if you default
Credit-Builder Loans
The lender deposits money into a savings account and reports your payments You get the money after repaying the loan.
Pros Establish credit history get cash at the end
Cons Doesn’t provide immediate funds
Co-signing
A co-signer with good credit applies with you and provides a guarantee of repayment.
Pros: Better approval odds and rates
Cons: Co-signer is responsible if you default
Payday/Title Loans
Provide immediate cash backed by your paycheck or car title. Should be a last resort due to high costs.
Pros: Fast approvals, no credit check
Cons: Extremely high interest, risk of losing car
What Loan Amount Can I Get With No Credit?
The maximum you can borrow will vary by lender and loan type. Some common loan amounts for borrowers with no credit include:
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Secured personal loans – Up to $25,000
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Credit-builder loans – $500 to $1,000
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Co-signed loans – Up to loan maximums, often $50,000+
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Payday loans – $100 to $1,000+
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Auto title loans – 25% to 50% of car’s value
It might be tempting to borrow as much as you can, but it’s smart to only borrow what you need. Over the life of the loan, the interest rates will be higher if the loan amount is bigger.
Tips for Getting Approved for a Loan With No Credit
When applying for a personal loan with no credit history, follow these tips to boost your chances of approval:
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Check eligibility requirements: Make sure you meet age, income, and other qualifications.
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Apply with the right lender: Seek out lenders that work with first-time borrowers.
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Provide proof of income: Pay stubs or tax returns show you can afford payments.
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Bring a co-signer: Adding someone with good credit can help.
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Put up collateral: With a secured loan, collateral offsets credit risk.
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Start small: Don’t apply for more than you need. Asking for less improves approval odds.
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Prep your documentation: Have bank statements, contact info, and other paperwork ready.
With some preparation and researching your options, getting approved for a personal loan without established credit is achievable. Just be sure to compare interest rates and fees carefully. While no credit loan options provide a way to access financing, they tend to be more expensive than loans from traditional lenders.
Alternatives to Consider
If you need money now but don’t qualify for a loan, here are some options to consider:
- Borrow from family or friends – No credit check, but can strain relationships
- Use a credit card – Low limits but fast access to cash
- Save up – Takes time but 0% interest
- Seek nonprofit assistance – For those facing financial hardship
- Delay major expenses – If possible based on your situation
The most prudent option is building some credit history before applying for a large personal loan. A secured credit card or credit-builder loan can help establish your profile over 6-12 months. With a bit of patience and responsible credit use, you’ll have an easier time qualifying down the road.
The Bottom Line
Having no credit doesn’t preclude you from getting a personal loan, but it does limit your borrowing power. Loan amounts of a few thousand dollars are reasonable for first-time borrowers with no credit history. Exactly how much you can qualify for will depend on factors like your income, existing debts, and whether you provide collateral. While no credit loans open doors, make sure you compare options carefully and borrow only what you need.
Can you get a loan with no credit history?
Lending decisions are up to individual lenders. Because of this, you might be able to get a personal loan from a lender even if you have bad credit. There just may be fewer options. And the loans youâre eligible for may charge higher interest rates and fees.
Alternatives to getting a loan with no credit
If a personal loan doesnât seem possible now, there may be other ways to borrow money. Some might even help you build credit if you practice responsible habits like making on-time payments every month.
You could become an authorized user on the credit card account of a trusted family member or friend. While youâll be able to make purchases with your card, the primary cardholder is ultimately responsible for all the charges made on the account. If you use the account responsibly and let the credit bureaus know about it, becoming an authorized user could help your credit. But negative actions could hurt both of your credit.
Best personal loans for people with bad credit scores in the USA
FAQ
How much can I Borrow with no credit history?
How much you can borrow with no credit history depends on the type of credit accounts you’re able to acquire. Some types of credit cards, like store credit cards, credit-builder loans, and secured credit cards, may let you borrow hundreds or even thousands of dollars.
What are the best personal loans for no credit?
NetCredit offers personal loans for no credit with no origination fee. It offers $1,000 – $10,000 in funding with a repayment period of 6 – 60 months. The APRs are on a higher end, though, at 34% – 99. 99%. BHG Money offers the best personal loans for no credit with long payoff periods and large loan amounts.
Can you get a personal loan if you have no credit?
Having little to no credit history can make borrowing more difficult. But it doesn’t automatically mean a personal loan is out of reach. In general, personal loans are relatively small unsecured loans that allow borrowers to spend as they see fit. Building credit takes time, but starting now could help in the future.
Where can I get a no credit loan?
Upstart, a lending platform that works with banks and credit unions to offer loans of $1,000 to $75,000 with 36 or 60-month terms for repayment, has the best deals on no credit loan loans. Personal loans through Upstart also have low APRs, of 6. 6% – 35. 99%, typically. However, there is a 0% – 12% origination fee.
How fast can you get a loan with no credit?
LendingUSA offers the best loans that you can get quickly with no credit. The company may approve you the same day you apply and then fund your loan 1 business day after approval. You could get a loan of $1,000 – $47,500 with a repayment period of 6 – 60 months. LendingUSA has an APR range of 0% – 29. 99%.
Can I get a personal loan with no credit history?
Lenders use your credit score to decide whether you qualify for a personal loan, as well as your interest rates, loan amount, and monthly payment. If you need a personal loan but have no credit history, you may have more options than you think. To help, we have put together this guide on how to get a first-time personal loan with no credit history.
Can you get a personal loan with a 0 credit score?
Having little to no credit history can make borrowing more difficult. But it doesn’t automatically mean a personal loan is out of reach. In general, personal loans are relatively small unsecured loans that allow borrowers to spend as they see fit.
Can I get a $10,000 loan with no credit?
It is possible to get a $10,000 loan even if you have bad credit, but it might be harder and the interest rates or fees might be higher.
How big of a loan can I get with poor credit?
How much money can I borrow with bad credit? Bad-credit lenders typically provide loans for $1,000 to $50,000, but the loan amount you qualify for depends on your credit, income and existing debts. The best way to determine how much you qualify for is to check your rate with a lender that offers pre-qualification.
What credit score do you need to get a $30,000 loan?