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If you need to borrow money but have little to no credit history, you might have a hard time finding a lender to work with. But some personal loan lenders that offer no-credit-history loans with other qualifying criteria.
Here’s what you should know about no-credit-history loans:
- 5 lenders who offer loans to people with no credit history
- How to get a loan with no credit history
- Watch out for predatory loan practices
- How to build credit history
- How to monitor your credit
5 lenders who offer loans to people with no credit history
Having no credit and having bad credit can make it challenging to qualify for a loan, but they’re two different things. If you don’t have a credit history it means you haven’t taken out a loan or credit card and there’s no information about you to report to the three main credit bureaus — Equifax, Experian, and TransUnion.
If you have bad credit it means you have enough information on your credit reports to generate a score. Your credit score is a three-digit number that indicates to lenders how you manage debt and how likely you are to repay a loan. Having bad credit could signal to lenders that you’ve had trouble managing credit in the past.
Here are the credit score ranges for bad, fair, and good credit:
Several lenders offer bad credit loans — but your options may be limited, and you’ll typically pay a higher interest rate to borrow money than someone with good credit.
If you have no credit history at all, you likely don’t even have a credit score yet. Lenders don’t have any information about how you handle credit, so they could still see you as a potential risk. In this case, you’ll need to find a lender that lets you qualify for a loan based on factors besides your credit, such as your income and employment history.
Here are Credible’s partner lenders that offer personal loans to borrowers with no credit history:
|Lender||Fixed rates||Loan amounts||Min. credit score||Loan terms (years)|
|9.95% - 35.99% APR||$2,000 to $35,000**||550||2, 3, 4, 5*|
|7.99% - 35.99% APR||$2,000 to $36,500||580||2, 3, 4, 5, 6|
|18.0% - 35.99% APR||$1,500 to $20,000||None||2, 3, 4, 5|
|11.69% - 35.93% APR7||$1,000 to $50,000||560||3 to 5 years 8|
|5.4% - 35.99% APR4||$1,000 to $50,0005||580||3 to 5 years4|
Best for: Fast loan funding
With Avant, you can borrow $2,000 to $35,000**. Avant offers flexible credit requirements, which could make it easier to qualify if you have poor or no credit history.
Best for: Streamlined approval and application process
LendingPoint specializes in working with borrowers with near-prime credit scores and might also work with borrowers who don’t have a credit history.
In addition to your credit, LendingPoint will also consider your employment and annual income when you apply for a loan.
Best for: Small loan amounts
Unlike some personal loan lenders, OneMain Financial offers both unsecured and secured personal loans. If you opt for a secured loan, you’ll need to provide collateral — like a car, boat, or RV.
A secured loan might be easier to qualify for if you don’t have a credit history. If you’re approved, you’ll need to visit a branch office in person to discuss your options.
Best for: Free educational tools
If you borrow through Universal Credit, you’ll receive access to free credit score monitoring, educational tools, and personalized recommendations that could help you build your credit. You can borrow $1,000 to $50,000 with Universal Credit.
Best for: Borrowers with solid education and job histories
If you don’t have a credit score at all, Upstart could be a good choice. Upstart uses machine learning to “price credit,” meaning you could qualify if your education and job history demonstrate potential that’s not reflected in your credit score.
How to get a loan with no credit history
Getting a personal loan with no credit history might be tough, but it’s still possible. If you’re ready to apply, follow these four steps:
- Research and compare lenders. Be sure to compare as many lenders as you can to find the right loan for you. Consider not only interest rates but also repayment terms and any fees the lender charges.
- Pick your loan option. After comparing lenders, choose the loan option that best suits your needs.
- Complete the loan application. Once you’ve found a lender, you’ll need to fill out a full application and submit any required documentation, such as bank statements or pay stubs. If you’re applying with no credit history, you might also need to provide your employment history or other information, depending on the lender.
- Get your loan funds. If you’re approved, the lender will have you sign for the loan so you can get your money. The time to fund for personal loans is typically one week or less — though some lenders, such as OneMain Financial, will fund loans on the same or next business day after approval.
No matter what type of personal loan you choose, be sure to consider how much the loan will cost you over time. You can estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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What to do if you can’t qualify for a personal loan
If you’re still having a hard time qualifying for a personal loan with no credit history, here are a couple other options to consider:
- Find a cosigner. Having a cosigner with good credit can improve your chances of getting approved for a loan if you don’t qualify on your own. Even if you don’t need a cosigner to qualify, having one could get you a lower interest rate than you’d get on your own.
- Apply for a secured loan. While many personal loans are unsecured, some lenders also offer secured personal loans that require collateral, such as a car or other valuable item. These types of loans are less risky for the lender, which could make it easier to get approved even if you don’t have a credit history. A secured personal loan might also come with lower interest rates compared to unsecured loans. But if you fail to make your loan payments, the lender can take your collateral.
Before you take out a personal loan, remember to consider as many lenders as possible to find the right loan for your needs. Credible makes this easy — you can compare your prequalified rates from multiple lenders in two minutes.
Watch out for predatory loan practices
While some trustworthy lenders offer no-credit-history loans, you also need to look out for predatory lenders.
For example, if you’re looking for a personal loan that doesn’t require a credit history, you should generally avoid the following types of loans:
These types of loans often charge astronomically high interest rates and fees — sometimes equating to an annual percentage rate (APR) of 300% to 500%. They can also trap you in a cycle of debt that takes even longer to pay off.
Most lenders don’t report your on-time payments on these types of loans to the credit bureaus, which won’t help you build credit that could help you qualify for better loans in the future. But if you’re late or miss a payment, the lender could report it to the credit bureaus, which will damage your score.
Ultimately, these loans aren’t worth it unless as an absolute last resort.
How to spot a no-credit loan scam
Plenty of scam artists are looking to take advantage of borrowers who are desperate for a loan. Here are several personal loan scam warning signs to keep an eye out for:
- Not requiring a credit check: Legitimate personal loan companies typically review your credit to determine how likely they think you are to repay a loan. While some short-term loans — such as payday or pawn shop loans — don’t require a credit check, others could be a scam.
- Demanding upfront payment: You should never have to pay money before you get your loan funds. Also watch out for scammers wanting you to pay through unusual methods that can’t be tracked, such as with a prepaid credit card.
- Using high-pressure sales tactics: Scammers might use language like “limited-time offer” or “act now” to push you into making a fast, uninformed decision.
- Approaching you about the loan: While legitimate companies sometimes advertise through the mail with preapproved loan offers, a company approaching you out of the blue with a loan offer could be a scam.
- Lacking a physical location: A real, vetted loan company should be able to provide a physical address that you can verify. If not, it might be a scam.
- Not feeling comfortable: Trust your gut — if something seems off, it probably is.
How to build credit history
It’s a good idea to focus on building your credit history so you can more easily qualify for loans in the future.
Having good credit can help you in your everyday life, too, such as if you want to rent an apartment or get competitive rates on insurance.
Here are a few ways to build credit history:
- Take out a small secured loan. When you take out a secured personal loan, you’ll provide the lender with an asset, such as a car or savings account. You may be able to get a lower interest rate since providing collateral makes you less of a risk to a lender. But if you default on your loan, the lender can take your collateral.
- Apply for a credit-builder loan. When you apply for a credit-builder loan, the lender will deposit a small amount of money into a locked savings account, and you’ll pay the lender back over six to 24 months. At the end of the repayment term, you’ll receive your funds back. Your loan payments will be reported to the credit bureaus. Since your payment history makes up the biggest chunk of your credit score, making on-time payments over the life of a loan can help build a positive credit history.
- Get a secured credit card. To get this type of card, you’ll pay an upfront security deposit and get a line of credit equal to your deposit amount. After you show that you can make on-time payments, you might be able to get your security deposit back. And after making on-time payments for a certain period of time, your credit card issuer might increase your credit limit or upgrade you to an unsecured credit card.
- Ask if you can be an authorized credit card user for a trusted friend or relative. Having a family member or friend add you as an authorized user to their credit card can help you piggyback off their good credit. You’ll receive a card that you can make purchases on, but the primary cardholder will be responsible for the payments. It’s a good idea to come up with a plan about how you’ll help with the payments before you become an authorized user. You typically don’t even have to use the card for this to improve your credit.
How to monitor your credit
As you work to build your credit, it’s also a good idea to monitor your credit. This way, you can see where you might need to make improvements as well as keep an eye out for potential fraud. Here are a few ways to do this:
- Review your credit reports. You’re entitled to a copy of your credit report from each of the three credit bureaus every 12 months. You can use a site like AnnualCreditReport.com to review your credit reports for free. If you’d like to review your credit throughout the year, you might consider accessing a report from one of the credit bureaus every four months.
- Sign up for a credit monitoring service. Several services are available that allow you to monitor your credit — some are free, while others charge a fee. For example, Experian Boost provides free credit monitoring and also lets you have other bills (such as cell phone or utility bills) reported to the credit bureaus, which could boost your credit score.
- Check with your bank or credit card issuer. Many banks and credit card issuers provide free updates to your credit score and credit report.
Keep Reading: Emergency Loans: How to Get a Personal Loan Fast
About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 5.40%-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 10%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.