Getting a personal loan with no credit history is a bit of a catch-22. In general, you need good credit to get a loan, but it’s difficult to build credit if you can’t get a loan. However, some lenders — particularly online lenders — may look beyond your credit history when determining loan approval or offer secured or cosigned loan options for first-time borrowers.
It can be harder to get first-time personal loans with no credit history, but it’s not impossible. Some lenders are willing to give loans based on other criteria — such as income, employment history and other factors — rather than your credit score. But, because borrowers with no credit history are considered higher risk, lenders usually offset that risk by charging higher rates and fees.
However, there are some options to qualify for personal loans with lower rates, such as secured loans that use collateral to back the loan. Another option is to get a loan with a cosigner or co-borrower with good credit on your loan application. You may also want to talk to your bank or credit union, which may have loan options for existing customers in good standing.
Consider these lenders that may accept borrowers with no credit history. Or, alternatively, lenders that offer secured, cosigned or joint applicant personal loans for first-time borrowers.
| Lender | Interest rate | Loan amount | Loan term | Turnaround time | |
|---|---|---|---|---|---|
| Upstart | 7.40% to 35.99% | $1,000 to $50,000 | 36 or 60 months | As soon as the same day | |
| OppLoans | 160% to 179% | $500 to $4,000 | 9 to 18 months | 1 business day | |
| OneMain Financial | 18% to 35.99% | $1,500 to $20,000 | 24, 36, 48 or 60 months | As soon as one hour | |
| Achieve | 8.99% to 29.99% | $5,000 to $50,000 | 2, 3, 4 or 5 years | As soon as same business day | |
| SoFi | 8.99% to 29.49% fixed APR | $5,000 to $100,000 | 2 to 7 years | Up to 2 business days | |
| Prosper | 8.99% to 35.99% | $2,000 to $50,000 | 2 to 5 years | As soon as 1 business day | |
| Lending Club | 8.98% to 35.99% | $1,000 to $40,000 | 2 to 5 years | As soon as 24 hours after approval | |
| Navy Federal Credit Union | 8.99% to 18.00% | $250 to $50,000 | Up to 5 years | As soon as the same day |
It’s important to know what you’re getting into with a first-time personal loan, so carefully consider these key components.
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There are a number of things you can do to improve your chances of getting a personal loan with no credit history.
While this isn’t an immediate solution, building a credit history will help you qualify for loans and other credit for the rest of your life. Ways to build your score include becoming an authorized user on someone else’s credit card or applying for your own credit card. If those options aren’t feasible, almost anyone can get a secured credit card or a credit builder loan, both of which put you on the path to creating a solid credit profile.
Loans that are secured with collateral — like a car loan — are usually easier to qualify for than unsecured personal loans with no credit history, and they typically have lower rates. But you may have to look around a bit to find a lender willing to take a chance on a borrower with no credit.
If you have a trusted friend or family member — with good to excellent credit — willing to cosign a loan with you, that can practically guarantee loan approval. Plus, a history of on-time payments helps to build your credit profile for the future.
But keep in mind that if you have late or missed payments, both you and your cosigner’s credit will be negatively impacted. And, if you default on the loan, your cosigner is responsible for repaying the loan, which is a difficult position to put someone in.
Cosigner and co-borrower — sometimes called a joint applicant — are often used interchangeably, but there are important distinctions. When you have a co-borrower on your loan, you are both equally responsible for repaying it, and you’re both entitled to the funds. Some lenders, such as Prosper, do not allow cosigned loans but accept joint applicants
If you’re a customer in good standing with your bank or credit union, you might be able to get a loan or personal line of credit there. The amount could be small, but it probably won’t charge an exorbitant rate, and it can help you build a credit profile. You might even be able to use your savings or emergency fund as collateral to get an even more competitive rate.
Follow these steps when applying for a first-time personal loan.
There are a few types of loans that don’t check your credit or don’t care if you have a credit history. Most commonly, these are payday loans, title loans or loans from tribal lenders. They can be tempting because almost anyone with an income can get one and funding is typically fast.
However, these loans are a bad idea for a number of reasons. Most notably, they are an expensive form of financing with interest rates usually in the triple digits. Also, loan terms are often short or require weekly or bi-weekly payments, which can really stretch your budget and lead to a dangerous cycle of debt. Plus, these high-risk loans don’t normally report to the credit bureaus, meaning they won’t do anything to help you build credit or improve your chances of qualifying for loans in the future.
Despite your best efforts, you may not be able to qualify for a first-time personal loan without establishing a credit history. But cash advance apps are available to almost anyone with a bank account and regular income — and they typically don’t require a credit check.
Getting a first-time personal loan with no credit history can be a challenge, and you could end up with high rates and unfavorable loan terms. There are some options, such as secured or cosigned loans, but if you can wait until you’ve built a credit history before applying for a personal loan, you’ll be in a position to qualify for better rates and terms.
It really depends on your circumstances. For example, if you’re looking to buy a car and a parent will cosign a loan with you, that can be a great way to start building your credit profile. However, if you can only qualify with a predatory lender that charges triple-digit rates, you’re better off considering alternatives until you’ve earned a decent credit score.
You’ll find your credit score in your credit reports, which you can find online for free. As you start to build your credit, it’s a smart move to regularly check your credit reports to make sure the information is accurate and to track your progress.
The easiest first-time loans to get are usually payday loans, title loans and pawn shop loans. But the rates are incredibly high, the loan terms are super short and they often lead to a cycle of debt that can be difficult to break.
You’ll probably only qualify for loans under $1,000 when you don’t have a credit history — unless you have collateral or a cosigner.
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