How to Get a Personal Loan with No Credit History
Young borrowers need to know how to get a personal loan when they are just starting off financially. College students can often build credit by signing up for credit cards, but these tools pose a problem with high interest rates and balances that are difficult for young borrowers to pay off. It may be wiser to wait until after college to build credit, beginning with a personal loan.
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Instructions
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Gather your financial documents and personal information. Create a file to keep these items, as well as loan applications, so you can easily stay organized. Include your pay stubs for proof of income s well as past tax returns.
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Download your credit report. Even if you have little or no credit history, something should come up when you search the free annual credit report site using your social security number, name and current address. Check the report for errors and correct any that have occurred.
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Contact your bank where you have a checking or savings account. Ask to talk to their loan officer or a bank manager who can talk to you about getting a personal loan with no credit history. Many banks will extend a small credit line to clients in good standing. If you've never bounced a check and have had the account for several years, this will be in your favor.
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Apply online for a personal loan. You can try peer to peer lending. That allows you to explain your situation and credit history to potential lenders. You can also apply for personal loans through online banks that work with customers with no credit or bad credit.
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Consider a home equity loan. If you own a home outright, you will likely be able to get a personal loan even if you have no credit history. However, be careful, as it's generally not a great idea to borrow against your equity if you don't have the means to pay back the loan quickly.
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Tips & Warnings
If you're not as concerned with building credit as you are about getting a loan, you can put valuables on the line as collateral for a loan from a pawn shop.
Don't default on your loan. This will turn your lack of credit into bad credit, and that can be worse.
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- Photo Credit Daniel Moore
